Exam Flashcards
Product orientation
A situation where a business prioritises research and development of high quality, specialised products, rather than prioritising market research.
Patent
A patent is the legal right to be the only producer and seller of a good for a period of time
Market leader
The product or brand with the highest market share.
Market orientation
A situation where the sole focus of a business is on the needs and wants of a market segment. Extensive and ongoing market research will be at the centre of all decision making.
Unique selling point
A feature of the product that distinguishes it from its competitors.
Social organization
Any organisation that has a social and/or environmental purpose at its core; it describes the primary purpose of a business, not its legal form.
Market share
The value of a single company’s sales or revenues compared with the sales of all businesses in a market
Market growth
The increase in sales revenues or sales volume in an individual market over time.
BCG matrix
is a tool that helps businesses that have multiple products to decide on their marketing strategies. Products are placed onto the matrix depending on two variables: market share and market growth.
Marketing Plan
A document that outlines a company’s entire marketing process.
The main elements of a marketing plan
the marketing objective
the marketing budget
segmentation and the target market
market research
marketing strategies
control tools
Marketing objective
The marketing objective will provide direction for the marketing function. If achieved, the marketing objective should help the company achieve its overall business objectives.
Budget
A plan that outlines a business’ revenue and expenditure over a period of time. The way in which the budget is set could be:
objective based, where an estimate is made of the budget needed to achieve the marketing objective
sales based, where a fixed percentage of the company’s sales revenue is allocated to marketing
incremental based, where the previous year’s marketing budget is used as a guide, with a percentage increase to cover inflation
Segmentation
The process of dividing a broad market group into various segments (age, interests, special needs, location and so on); allows businesses to develop marketing strategies to meet the needs of diverse groups.
Marketing research
Market research involves gathering information about consumers’ needs, tastes, habits and preferences in order to aid marketing decisions.
Marketing strategies
Marketing strategies are long-term actions that aim to achieve the marketing objective
Control tools
Control tools allow managers to assess whether marketing strategies have been successful. This involves gathering quantitative and qualitative data to see whether the objectives of the business have been met. Data can be gathered from a number of sources, including:
sales revenue and profit data
the number of repeat customers
surveys and focus groups
Target market
The market segment at which a product is aimed
Main methods of segmentation
geographic segmentation
demographic segmentation
psychographic segmentation
Geographic segmentation
Geographic segmentation involves dividing potential customers based on their geographic location.
Demographic segmentation
Demographic segmentation involves dividing consumers according to characteristics such as age, gender and occupation.
Psychographic segmentation
Psychographic segmentation divides the population according to lifestyle and personal interests.
Targeting
Selecting the most appropriate market segment for a marketing campaign.
Mass markets
A market for goods that are produced in very large quantities.
Niche markets
A small part of a larger market where customers have very specialised needs.
Product positioning maps
Product positioning maps are visual representations of how various competitors might attempt to position their brands in the eyes of the consumer
Differentiation
The process of highlighting the differences between a product and its rivals
Product life cycle
is a model that helps businesses make decisions about a product’s marketing mix. The model shows a product’s typical trend in sales over time
Product
is the result of a production process where resources are used to create a good or service to satisfy a need or a want
The product life cycle is split into five stages:
Research and development (R&D)
Introduction
Growth
Maturity
Decline
Extension strategies
are methods that businesses use to lengthen the maturity stage of the product life cycle. Using extension strategies can be a cost-effective way of extending the sales of a product.
Brand
A name, symbol or design that is used to identify a product or company.
Brand awareness
The degree to which consumers recognise a product by its name and special characteristics.
Brand development
Building brand awareness by cultivating the business’s values and consumer perceptions of the product
OR
is the process of creating and making a new strong brand. A strong brand will allow a company to launch secondary products with relative ease.
Brand loyalty
When customers continue to buy a particular brand, even where alternatives exist
Brand value
can mean the value of the intellectual property associated with the brand
OR
the additional value that consumers assign to the product because of its strong brand.
Cost-plus (markup) price
A pricing strategy where the price charged for the product reflects a markup added to the direct and indirect costs of production.
Penetration pricing
A pricing strategy where the business sets a very low price on a new product or service to encourage customers to buy it; later the price is increased.
Loss leader pricing
is to price a product lower than its production cost, in order to attract customers who can then be sold other, more expensive products
Predatory pricing
A pricing strategy where a business sells a product or service at such a low price that other businesses cannot compete and are forced to leave the market; illegal in many countries.
Premium pricing
A pricing strategy where a business sets the price of its products higher to create the impression that the products are higher quality or value than their lower-cost equivalents
ProMotion
is the use of advertising, sponsorships, sales promotions and personal selling to inform and persuade customers to buy a product.
Above the line promotion
Promotion aimed at mass audiences, generally not targeted
Place
is related to how products are delivered from the producer to the customers, and it involves various distribution channels.
Intermediary
A person or business that acts as a go-between in a transaction.
Wholesalers
specialise in purchasing large quantities of stock from producers, storing the stock, and then selling it on to retailers and – sometimes – consumers.
Retailers
purchase goods from wholesalers and producers, then sell them to the final consumer
Agent
A person who acts on behalf of another person or group.
Commission
A type of payment to an employee or agent based on the number of sales or a percentage of the value of sales
