Definitions 1.1 Flashcards
Marketing mix
The plan for getting the right blend of product, price, promotion and place
Marketing objectives
the targets the marketing department must achieve, such as increasing sales by 15% within 12 months
Market segmentation
dividing a market up by customers’ age, gender or income to find areas that are under-served
Marketing strategy
the medium-to-long term plan for meeting the marketing objectives, delivered through the marketing mix
Economies of scale
factors that cause cost per unit to fall when a firm operates at a higher level of production
Franchise
a business that sells the rights to the use of its name and trading methods to local businesses
Generic brands
brands that are so well known that customers say the brand when they mean the product - for example, ‘I’ll hoover the floor’
Product differentiation
the extent to which customers perceive your brand as being different from others
Bias
a factor that causes research finding to be unrepresentative of the whole population
Primary research
finding out information first hand
Secondary research
finding out information that has already been gathered
Sample size
the number of people interviews; this should be large enough to give confidence that the findings are representative of the whole population
Market map
a grid plotting where each existing brand sits on scales based on two important features of a market
Price elasticity
a measurement of the extent to which a products demand changes when the price is changed
Unique selling point
a consumer benefit that no rival can match, perhaps because it is protected by a strong patent
Complementary goods
these are bought in conjunction with each other
Inferior goods
goods for which sales fall when people are better off, but rise when consumers are struggling financially
Luxury goods
goods for which sales rise rapidly when people are better off, but may fall rapidly in hard times
Normal goods
goods for which sales move in line with changes in consumer incomes
Seasonal variation
change in the value of a variable, e.g. sales, in relation to the seasons
Substitutes
products or services in competition with each other, so customers will substitute one for the other
Supply curve
a line showing the quantity of goods firms want to supply at different price levels (the higher the price, the more enthusiastic the supply)
Demand curve
a line showing the demand for a product at different prices (the higher the price, the lower the demand)
Market price
the price of a commodity that has been established by the market - that is, where supply equals demand
External constraints
something outside the firm’s control that can prevent it achieving its objectives
Predatory pricing
pricing low with the deliberate intention of driving a competitor out of a business
Price-elastic
a product with demand that is highly priced sensitive, so price elasticity is above 1
Price-inelastic
a product with demand that is not very price sensitive, so price elasticity is below 1
Negative income elasticity
a product for which sales fall when people are better off (but rise when people are worse off)
Positive income elasticity
a product for which sales rise when people are better off (but fall in recessions)
