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igcse 9th-10th > igcse business section 3 > Flashcards

igcse business section 3 Flashcards

1
Q

Marketing

A

identifying customer wants and satisfying them profitably

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2
Q

customer

A

a person, business or other organisation which buys goods or services from a business

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3
Q

the sales team

A

responsible for sales of product, may have an export team

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4
Q

the market research section

A

responsible for finding out customers needs

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5
Q

the promotion section

A

organises the advertising, and decide a marketing budget

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6
Q

distribution section

A

transports products

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7
Q

the role of marketing

A

-identify customers needs
-satisfy customers needs
-anticipate changes in customers needs
-maintain customer loyalty
-build relationship to gain info abt customers

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8
Q

customer loyalty

A

when existing customers continually buy products from the same business

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9
Q

customer relationships

A

communicating with customers to encourage them to become loyal to the business and its products

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10
Q

market share

A

percentage of total market held by one brand or business

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11
Q

a successful marketing department should be able to

A

-maintain or improve business image
-develop new products or existing products
-increase revenue and profitability
-increase or maintain market share
-target a new market or market segment
-enter new markets at home or abroad
-raise customer awareness

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12
Q

consumers

A

buys goods or services for personal use not to re-sell

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13
Q

why customers’ spending patterns change

A

-change in tastes and fashions
-change in technology
-change in income
-ageing populations

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14
Q

why some markets became competitive

A

-globalisation
-internet/ e-commerce
-transportations improvements

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15
Q

how can businesses respond to change in spending patterns

A

-maintain good customer relationship
-keep improving existing products
-bring out new products to keep customers’ interests
-keep costs low to maintain competitiveness

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16
Q

mass market

A

a very large number of sales of a product

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17
Q

adv of mass market

A

-high total sales
-economies of scales
-opportunities of growth
-risks can be spread

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18
Q

disadv of mass market

A

-high level of competition
-high costs of advertising
-standarised products may not meet specific needs of customers

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19
Q

niche market

A

small usually specialised segment of a much larger market

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20
Q

adv of niche market

A

-high levels of customer loyalty and good customer relations
-reduces competitions

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21
Q

disadv of niche market

A

-relatively small so limited sales
-if product is no longer in demand, business will fail

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22
Q

market segment

A

an identifiable sub- grp of a whole market in which customers have similar characteristics or preferences

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23
Q

adv of market segmentation

A

-cost effective by making a product which will meet wants
-higher sales and profits
-offers opportunities to increase sales

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24
Q

ways of segmenting a market

A

-age
-region/ location
-gender
-lifestyle
-use of product
-socio-economic group

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25
Q

which method of segmentation should be used

A

-detailed analysis of the market and size of segment
-company and brand image
-costs of entering segment

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26
Q

market research

A

process of gathering, analysing and interpreting info abt a market

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27
Q

market research finds out the answers to..

A

-would customers be willing to buy my products?
-what price would they be prepared to pay?
-where would they be most likely to buy my product?
-what feature of my product do customers like or dislike?
-what type of customer would buy my product?
-what type of promotion would be effective?
-how strong is competition and who are the main competitors?

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28
Q

product- oriented

A

business whose main focus of activity is on the product itself

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29
Q

market- oriented

A

a business in which carries out market research to find out its customers wants before a product is developed and produced

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30
Q

marketing budget

A

financial plan for marketing of a product or product range for some specified period of time

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31
Q

primary research

A

collection and collation of original data via direct contact with potential or existing customer

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32
Q

secondary research

A

uses info that has already been collected and is available for use by others

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33
Q

advantages of primary research

A

-up to date
-first hand
-help a specific problem
-not available to other businesses

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34
Q

limitations of primary research

A

-expensive
-takes time

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35
Q

questionnaires

A

set of questions to be answered as a means of collecting data for market research

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36
Q

online surveys

A

requires the target sample to answer series of questions over the internet

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37
Q

interviews

A

involves asking individuals a series of questions, often face to face over the phone

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38
Q

focus group

A

a group of people who are representative of the target market

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39
Q

process of primary research

A

1.purpose?
2. decide best method
3.decide size of the sample
4.carry out research
5.collate data and analyse results
6.produce a report

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40
Q

adv of questionnaires

A

-detailed info can be gathered
-can obtain customer’s opinions
-can be online
-can encourage ppl by vouchers and prices

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41
Q

disadv of questionnaires

A

-not very accurate, can be misleading
-takes time and money
-analysing is also time consuming

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42
Q

adv of online surveys

A

-faster
-cheaper
-easy to complete
-can be quickly presented

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43
Q

disadv of online surveys

A

-absence of interviewer
-cannot reach those who dont have internet access
-scope for fraud

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44
Q

adv of interview

A

-interviewer is able to explain any questions
-detailed info can be gathered

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45
Q

disadv of interview

A

-time consuming and expensive
-interviewer could lead the interviewee to answer in a certain biased way

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46
Q

adv of focus groups

A

-detailed info
-interaction can help understand people’s opinions
-quicker and cheaper than individual interviews

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47
Q

disadv of focus grouos

A

-time consuming and expensive if conducted by specialist agency
-could be biased if ppl are influenced by others
-can be dominated

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48
Q

sample

A

the group of people who are selected to respond to a market research exercise

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49
Q

random sample

A

people are selected at random as a source of info for market research

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50
Q

quota sample

A

when people are selected on the basis of certain characteristics as a source of info for market research

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51
Q

adv of secondary research

A

-often cheaper
-to access info that cannot be obtained by primary research
-newspaper may carry vital economic forecasts
-quicker

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52
Q

disadv of secondary research

A
  • may be out of date
    -available to all businesses
    -may not be completely relevant
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53
Q

internal sources of secondary research

A

-sales department
-finance department
-customer service department
-opinions of distribution and public relations personnel

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54
Q

external sources of secondary research

A

-newspapers
-governments statistics
-online sources
-trade association
-market research agencies

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55
Q

factors influencing accuracy of market research

A

-size of sample
-age of info
-bias
-sample selected
-the wording of the question
-who carried the research
-how the questions were phrased
-how carefully was the sample drawn up

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56
Q

ask yourself the following questions when designing a questionnaire

A

-who i need to ask?
-what i need to find out
-where will i carry my questionnaire

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57
Q

writing questionnaire questions

A

-no more than 12 questions
-short and clear with simple answers
-give choices
-avoid open ended questions
-don’t lead interviewee

58
Q

carrying out questionnaire

A

-how many people to ask?
-what time of day to carry out?
-where to carry out questionnaire?

59
Q

marketing mix

A

describes all of the activities which go into marketing a product or service, also summarised as the 4 Ps

60
Q

types of products

A

-consumer good
-consumer service
-producer good
-producer service

61
Q

what makes a successful products

A

-satisfy consumers wants and needs
-stimulates new wants
-right quality
-not expensive to make
-design is very important
-be distinctive and different

62
Q

product development

A

1.generate ideas
2.further research
3.decide if the company will be able to sell enough to be successful
4.prototype
5.test the market
6.full launch

63
Q

benefits of developing new products

A

-USP to be first in the market
-diversification
-expand into new markets
-expand into existing markets

64
Q

disadv of developing new products

A

-costs of carrying market research
-costs of producing trials and wasted material
-lack of sales if target market is wrong
-risk of company image loss

65
Q

brand name

A

unique name of a product that distinguishes it from other brands

66
Q

brand loyalty

A

consumers keep buying the same brand again and again instead of choosing a competitor’s brand

67
Q

brand image

A

image or identity given to a product which gives it a personality of its own and distinguishes it from its competitor’s brands

68
Q

branding

A

-brand loyalty
-creates a brand image
-unique/ brand name
-needs advertising
-higher prices
-higher quality
-assured quality
-unique packaging

69
Q

packaging

A

physical container or wrapping for a product, used for promotional and selling appeal

70
Q

role of packaging

A

-protects the product
-easy to transport
-easy to open and use
-suitable to fit in
-eye catching
-carries info
-promotion

71
Q

the product life cycle (definition)

A

describes the stage a product passes through from introduction, through growth and maturity and finally decline

72
Q

stages of the product life cycle

A

1.developed: -prototype tested -market research -no sales
2.introduced: -slow sales growth -no costs covered
3.grows: -grows rapidly -prices are reduced -profit cover costs
4. maturity: -sales increase slowly -intense competition -profits at its highest
5.saturation : -profits fall -high competition
6.decline: -unprofitable

73
Q

how stages of the product life cycle influence pricing

A

-introduction: sold at high prices, low prices could give wrong message
-growth: prices higher than competitors
-saturation/ maturity: prices reduced, as competitors may launch their own products
-decline: discounts if business does not plan to extend its life

74
Q

how stages of the product life cycle influence promotion

A

-introduction: more spending on promotion
-later stages: advertising reduced
-if business uses extension strategy, then promotion may be increases

75
Q

extension strategy

A

way of keeping a product at the maturity stage of the life cycle and extending the cycle

76
Q

how to extend product life cycle

A

-introduce new variation
-sell into new markets
-make small changes
-advertising campaign
-introduce new, improved, versions of old products
-use different retail outlets

77
Q

why adopt new pricing strategies

A

-try to break into a new market
-increase market share
-increase profit
-make sure all costs are covered and profit is earned

78
Q

cost plus pricing

A

the cost of manufacturing the product plus a profit markup
(total cost/output x markup)

79
Q

cost plus involves..

A

-estimates production of units
-calculate total cost of production
-adding a percentage markup

80
Q

cost plus pricing benefits

A

-easy method to apply
-used in different markets
-each product earns profit

81
Q

limitations of cost plus pricing

A

-could lose sales if selling price is higher than competitors
-profit will only be made if sufficient units are sold
-no incentive to reduce costs, any costs will be passed on as high prices

82
Q

competitive pricing

A

when the product is priced in line with or just below competitors’ prices to capture more of the market

83
Q

benefits of competitive pricing

A

-prices are at a realistic level
-avoids price competition so it reduces profit for all business
-often used when it is difficult for consumers to tell he difference between products of different businesses

84
Q

limitations of competitive pricing

A

-if costs of the business is higher, it could lead to loss
-higher quality products need to be sold at a higher price
-needs detailed research which takes time and money

85
Q

penetration pricing

A

price is set lower than a competitors prices to be able to enter a new market

86
Q

benefits of penetration pricing

A

-used for newly launched products
-should ensure that sales are made
-market share should build up quickly

87
Q

limitations of penetration pricing

A

-product is sold at a low price so profit per unit is low
-customers may get used to low prices and reject high prices
-not appropriate for some branded products

88
Q

price skimming

A

high price is set for a new product on the market

89
Q

benefits of price skimming

A

-can help establish the product as being of good quality
-costs can rapidly be recouped
-if product is unique then profits will be made before competitors

90
Q

limitations of price skimming

A

-high prices may discourage some potential customers
-may encourage competitors to enter market

91
Q

promotional pricing

A

when a product is sold at a very low price for a short period of time

92
Q

promotional pricing benefits

A

-to get rid of unwanted inventory
-renew interest in a product

93
Q

promotional pricing limitations

A

-lower revenue
-price competition

94
Q

dynamic pricing

A

businesses change product pricing, usually when selling online, depending on the level of demand

95
Q

impact of Psychology on price decisions

A

-high price could be a statue symbol
-0.99 creates the impression that it is cheaper
-low prices on daily base products
-repeat sales made when price reinforces consumers’ perception of the product

96
Q

price elastic demand

A

consumers are very sensitive to changes in price

97
Q

price inelastic demand

A

consumers are not sensitive to changes in price

98
Q

distribution channel

A

means by which a product is passed from the place of production to the consumer

99
Q

distribution channel 1

A

producer ——– consumer

100
Q

distribution channel 2

A

producer —-retailer—- consumer

101
Q

distribution channel 3

A

producer –wholesaler –retailer– consumer

102
Q

distribution channel 4

A

producer –agent–wholesaler –retailer– consumer

103
Q

advantages of distribution channel 1

A

-very simple
-suitable for products sold directly from the farm
-lower prices to customers
-can be sold by mail or internet

104
Q

disadvantages of distribution channel 1

A

-impractical if consumers dont live near factory
-not suitable for products that cannot be sent by post
-not cost effective, post can be expensive

105
Q

advantages of distribution channel 2

A

-sells large quantities to retailers
-reduced post costs

106
Q

disadvantages of distribution channel 2

A

-no direct contact
-price is higher, need to cover retailer costs

107
Q

advantages to distribution channel 3

A

-saves storage space and reduces storage costs
-retailer can purchase small quantities of fresh products as they have a short shelf life
-Wholesalers may give credit to customers
-wholesaler may deliver to retailer so it saves transport costs
-wholesaler can give advice to retailer

108
Q

disadvantages to distribution channel 3

A

-maybe more expensive for small shops
-wholesaler may not have full range of products to sell
-takes longer for fresh to reach
-price is often higher than direct selling

109
Q

advantages to distribution channel 4

A

-manufacturer may not know the best way to sell in other markets
-agent will be aware of local conditions

110
Q

disadvantages to distribution channel 4

A

-producer has less control

111
Q

agent

A

an independent person or business that is appointed to deal with the sales and distribution of a product or a range products

112
Q

methods of distribution

A

-department stores
-chain stores
-discount stores
-superstores
-supermarkets
-independent retailer
-direct sales
-mail order
-internet

113
Q

selecting distribution channel

A

-what type of product
-is the product technical
-how often is the product purchased
-how perishable is the product
-where are the customers located
-where do competitors sell

114
Q

promotion

A

where marketing activities aim to raise awareness of a product or brand, generating sales and help create brand loyalty

115
Q

aims of promotion

A

-create brand image
-improve company image
-compete with competitors products
-increase sales
-introduce new product
-inform people about particular issues

116
Q

advertisings

A

paid for communication with potential customers about a product to encourage them to buy it

117
Q

informative advertising

A

where the emphasis of advertising or sales promotion is to give full info abt the product

118
Q

persuasive advertising

A

trying to persuade the consumer that they rlly need the product and should buy it

119
Q

the advertising process

A

1.set objectives
2.advertising budget
3.advertising campaign
4.select media to use
5.evalutae effectiveness

120
Q

target audience

A

refers to people who are potential buyers of a product or service

121
Q

sales promotion

A

incentives aimed at consumers to achieve short term increase in sales

122
Q

advantages of sales promotion

A

-promote sales at times when sales are traditionally low
-encourages new customers to try an existing product
-encourages new customers to try a new product
-encourages existing customers to buy products more often to increase consumers loyalty
-encourages customers to buy your products instead of a competing brand

123
Q

what type of promotion to use

A

-stage of the product life cyle
-nature of the product
-nature of the target market
-cultural issues involved in international marketing

124
Q

social media marketing

A

a form of internet marketing that involves creating and sharing content on social media netweorks in order to achieve marketing and branding goals

125
Q

viral marketing

A

when consumers are encouraged to share info online about the product of a business

126
Q

e-commerce

A

the online buying and selling of goods and services using computer systems linked to the internet and apps on mobile phones

127
Q

benefits of using social media

A

-targets specific demographic grp who will share using viral
-target customers will see advert
-cheap
-reaches grps that are difficult to reach
-info can be updated regularly

128
Q

disadv to business advertising on social media

A

-can isolate customers if they find the adverts annoying
-business have to pay for advertising is using pop ups
-potential customers may not use social media
-lack of control
-messages may be altered in a bad way

129
Q

adv of a business using their own website

A

-no extra cost
-full control
-can update adverts quickly
-interactive, attractive
-provide more info by linking to other pages
-attracts funds and payments from other companies

130
Q

disadv of having own website

A

-may not see the website and be hidden by other search results
-relies on customers finding it
-design costs

131
Q

opportunities of ecommerce to business

A

-can promote worldwide cheaply
-orders sent directly to warehouse
-attractive and easy so encourages customers
-businesses can also make online purchases of supplies(B2B)
-easier to use dynamic pricing so higher revenue

132
Q

opportunities of ecommerce to consumers

A

-convenience
-can make comparisons between prices and products easily
-credit or debit card is easy
-can access business located abroad
-prices are much lower
-can buy without addition of retailers profit margin
-packaging and transport costs reduced bcs of competition

133
Q

threats of ecommerce to business

A

-high competition as consumers can easily find alternatives
-clear and attractive design can be expensive and need updates
-no face to face feedback
-transport costs are higher than traditional bcs packaged and delivery paid separately
-not suitable to sell personal services
-a large warehouse and efficient inventory
-legal rights to reject goods, returns can add to costs

134
Q

threats of ecommerce

A

-needs internet access
-system failure or week internet can be frustrating
-products cannot be touched or tried on
-no face to face so difficult to find more info
-identity theft or fraudulent, security risks

135
Q

marketing strategy

A

plan to combine the right combination of the four elemnts of the marketing mix for a product or service to achieve particular marketing goals

136
Q

marketing objectives

A

-increase sales by selling in new or existing markets
-increasing sales by improving product
-acheive target market
-increase market share
-increase sales in niche market
-maintain market share if comp is high

137
Q

recommend and justify marketing strategy

A

-objective
-budget
-target market
-balanced marketing mix

138
Q

legal controls

A

-weights and measure
-tradr description
-sales of goods
-supply of goods and service act
-illegal to make misleading pricing claims
-consumer contract regulation

139
Q

opportunities of entering foreign markets

A

-trade barriers lowered
-wider choice of location
-new markets gives chance of higher sales
-may have greater growth potential

140
Q

problems if entering foreign markets

A

-lack of knowledge
-cultural difference
-import restrictions
-increased risk of non payment
-increased transport costs

141
Q

methods to overcome problems from entering foreign markets

A

-join venture: management conflict, profit sharing
-licensing: inexperienced licensee, licensee can become competitors
-international franchising: quality problems, training and support needed
-localising existing brands: may be less successful, expensive to change promotion and packaging

igcse 9th-10th (4 decks)

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