Decision making to improve marketing performancd Flashcards
what is the first step of the marketing process?
to set marketing objectives
what are marketing objectives
targets set to be achieved by the marketing department
what might marketing objectives include
sales volume and value, market size, market growth, market share
what are marketing objectives influenced by?
internal and external factors
what are the internal factors that influence marketing objectives ?
corporate objectives - the marketing department should make sure it’s objectives are aligned with the company’s overall goals
finance - the finance department allocated the marketing departments budget which affects what they are able to do
human resources - marketing will have to adjust objectives to match what is achievable with staff levels
what are the external factors that influence marketing objectives?
market - state of the economy
technology - focuses objectives on sales and price
competition - actions of competitors have an affect
ethics and environmental factors- behaving in a harmful way can damage companys image
why is market research carried out ?
it supports the business in spotting opportunities, helps them to decide what to do next and supports with seeing if their plans are working and if marketing campaigns are having an effect
what is primary research?
collecting data first hand for a specific purpose eg, questionnaires, focus groups
advantages and disadvantages of primary data
it is specific for the purpose it is needed fot and is exclusive to the business however it is expensive and time consuming
What is secondary research?
the business uses data that has already been collected such as information from loyalty cards or government publications
advantages and disadvantages of secondary research
it easier, faster and cheaper however it won’t be as specific to the business and may contain errors or be out of date
what does quantitative research produce ?
numerical statistics , often uses multiple choice questionnaires with closed questions
what does qualitative research look into?
the feeling and motivations of consumers . it uses focus groups to have discussions about product, open questions
what does market mapping help a business to do ?
spot a gap in the market , it is useful for comparing similarities and differences between businesses
what is the importance of sampling ?
primary market research relies on taking a sample and trusting the findings from a sample are representative of the market population as a whole
what are the main methods of sampling?
random sample - bias is not introduced however it is expensive
quota sample - involves the population being segmented into groups that share characteristic factors. this can help market research focus more closely on target customers however is time consuming
stratified sample - used when the researcher wants to provide insights into specific market segments
what do confidence levels relate to ?
no matter how carefully selected your sample is there is still a chance that it won’t represent the whole population accurately
how can you make your estimate more useful?
calculate a confidence interval
what do confidence levels indicate ?
how sure you are that the value for the populations lies within the confidence interval
what would a confidence level of 95% indicate ?
that you are 95% certain that your confidence interval contains the value for the population
what do companies use technology for ?
to gather information about the lifestyles of their customers and the products that they buy which helps them to make sure promotions are targeting the rigjt people
how can loyalty cards help businesses?
it allows them to form a database of customer names and addresses and and their preferences based on what they buy. they can then target campaigns at certain people which makes them cheaper and more effective
what is price elasticity of demand ?
the responsiveness of quantity demanded to a change in price
what does it mean if something is price elastic ?
if there is a price increase then the demand will decrease and if there is a price increase then there will be an increase in demand . price elastic means it’s very responsive to a change in demand.
what does it mean if a product is price inelastic ?
if there is a price increase then the demand won’t change very much and the same if there is a price decrease . the demand for the product does not change much with price change
what factors may influence price elasticity of demand ?
number of substitutes for the product , how much effort it would take to switch to another product, necessity of the product and perceived value of the brand
what is the impact of decision making ?
if demand is price inelastic the business can increase prices however if it’s price elastic the business will want to think carefully before changing prices
what are the figures for price /income inelastic or elasticity
if it is larger than one it is highly price/income elastic , if it is one it is price/ income elastic and if it is zero it is price/income inelastic
what is income elasticity of demand ?
the responsiveness of demand for a product to a change in consumer incomes
what impact does it have on decision making ?
in a recession the demand will fall for products that have high income elasticity of demand
what are the factors influencing income elasticity of demand ?
whether the product is a necessity , whether the product is a luxury and the price relative to income
what is segmentation?
businesses break the market down into smaller units enabling them to serve the needs of particular customers more accurately
what is targeting ?
focusing marketing resources on a segment
what is positioning ?
what a business should do to market jts product
what are the approaches to segementstion?
demographic - dividing the market into groups based on gender , age etc
geographic -serving customers in a particular area
behavioural - divides the market into groups based on knowledge, attitudes, uses
income - divided as per monthly / annual income
what is niche marketing ?
where a business targets a smaller segment of a larger market, where customers have specific needs and wants
what is mass marketing ?
where a business sells into the largest part of the market , where there are many similar products on offer
what are the factors that determine positioning ?
where there is a gap in the market, what your competition does , whether you are a market leader , economic factors
name the 7P’s
price , product, place, promotion , people , process and physical evidence
what are the value of people in the marketing mix ?
all companies are reliant on having people who run them , having the right people is essential, it is important to hire and train the right people to deliver superior service
what is the value of the process in the marketing mix ?
the systems and processes affect the execution of the service , it could be pay system or distribution system or ordering process
how the service is delivered is what the consumer is paying for
what is the value of physical evidence in the marketing mix ?
there should be physical evidence that the service was delivered
what factors influence the marketing mix?
competitors , target market, locations, type of product , product or service ? product life cycle
what is the product portfolio ?
collection of products that make up a business
what does the boston matrix do?
it analyses the product portfolio, helps businesses decide whether to invest further into a product
what categories are products split into on the boston matrix ?
question marks - high market growth rate and low relative market share . invest to increase market share
stars - high market growth rate and high market share. invest to sustain growth
dogs - low market growth rate and low market share. phase out slowly
cash cow - low market growth rate and high market share. harvest
what are the stages of the product life cycle ?
introduction , growth, maturity, decline
what may some reasons for decline be ?
technological advance , increase competition, change in taste, economic circumstances
what are some strategies to reduce the rate of decline?
increase promotion, focus on profitable segments , reduce prices
how could you extend the product life cycle?
change price , promotion , product , change to more efficient distribution, develop new market segment
what factors effect price ?
cost of production , customer perception of value , customer demand , price elasticity of demand , marketing mix
what is predatory pricing ?
the business sets a low price in order to price competitors out of the market , they will make a loss for a period of time until competitor fails
what is psychological pricing?
charging a price below the next whole number to trick consumers into thinking the price is lower
what is cost plus pricing ?
business based price on the unit costs then adds a percentage as a mark up
what is price skimming
set a higher price to maximise profit , product sold to different segments at different times , top segment skimmed off first with higher price
what is penetration?
introducing a new product at a lower price than competition
what is each party in a distribution channel called ?
an intermediary
what does multichannel distribution involves ?
a business using more than one type of distribution channel
what is a direct distribution channel?
producer and consumer deal directly with eachother without the involvement of an intermediary
what does an indirect distribution channel involve V
the use of an intermediary
