Improving Marketing Performance (3) Flashcards
Name the 3 measures of marketing
- Market Growth
- Market Size
- Market Share
What does Market Size determine?
The potential number of customers
What is the formula for market share?
Business’ Revenue(sales)
—————————-x100
Entire Market’s Revenue(sales)
What is the formula for market growth?
New Market Size - Old Market Size
—————————————X100
Old Market Size
What is the formula for sales growth?
New Sales - Old Sales
————————X100
Old Sales
State the 6 main marketing objectives
- Sales Volume
- Brand Loyalty
- Market Growth
- Sales Value
- Sales Growth
- Market Share
Define Marketing
Maximising sales by anticipating the needs and wants of customers and finding the most profitable way to meet them.
Name 4 reasons as to why a business would conduct market research
- Descriptive (Sale trends/ Whether objectives have been met)
- Predictive (future trends/consumer behvaiour)
- Explatory (Is there any way to improve customer experience/whether the consumers would be interested if the business invested in a new service)
- Explanatory (why market share or repeat purchasing is low)
State 6 roles of marketing research
- Aid in pricing strategies
- Idenitfy trends in the market
- Meeting customer needs
- Customer feedback
- Competitor analysis
- Ideas for product development
What is primary market research?
Data collected first-hand by the business for a specific purpose
What is secondary market research?
Data that already exists and has been collected for a different reason.
What is sampling?
Choosing a small group of people that are representative of the market that you are targeting.
What are the 3 approaches to sampling?
- Random
- Quota
- Stratified
State 3 benefits of sampling
- Can be targeted
- Avoid errors
- Predict behaviours
State 3 drawbacks of sampling
- Bias
- Finding respondents
- Can be out of date quickly
State 3 benefits of market mapping
- Can show a gap in the market
- Shows where the business should avoid (oversaturated)
- Useful for analysing competitors
What is Extrapolation?
Extrapolation analyses past performance of a variable such as sales and extends the trend into the future.
Why is it important for businesses to understand correlation?
Allows them to understand the relationship between two factors, which could mean that they can manipulate them to achieve greater sales.
What is the drawback on Extrapolation?
Assumes that the future will be similar to the past which means that it may not be suitable for rapidly growing industries such as fashion and technology.
What does Elasticity measure?
How sensitive/responsive demand is to a change in price/ income.
State the benefit of knowing the Price Elasticity of Demand (PED)
Allow sthe business to anticipate how customers will react to a change in price.
What is the formula for PED?
% change in demand (increase=+) /
% change in price (decrease=-)
What does it mean if PED is higher than -1?
The % change in demand will be greater than the % change in price.
The demand is elastic
What does it mean if PED is between 0 and -1?
The % change in price will be greater than the % change in demand.
The demand is inelastic
What does it mean the business can do if the demand is inelastic?
They can charge the highest price possible.
State 4 factors affecting PED
- Strength of the brand
- Whether the product is a necessity (for example petrol, water, gas or electricty)
- Whether there are substitutes (can the product be replaced by something else)
- Whether similar products are available.
What is the formula for Income Elasticity for Demand (YED)?
% change in demand /
% change in price
If a product is greater than -1, what does this say about its price and income elasticity of demand and what type of product it is?
- Elastic for both income and price
- It is an inferior good
If a product falls between 0 and -1 or 0 and +1, what does it say about its price and income elasticity of demand and what type of product it is?
- Inelastic for price and income
- It is a necessary product
If a product is greater than +1, what does it say about its price and income elasticity of demand and what type of product it is?
- The product is elastic for income
- It is most likely a luxury good
Define Market Segmentation
The process of splitting the market into sub-groups of consumers with similar characteristics.
State 5 segments that must be considered when doing market segmentation
- Age
- Gender
- Geography
- Income
- Lifestyles
Define market targeting
Deciding which part of the market the business wants to operate in (the whole market or part of it)
What does it mean if a business chooses to target the** mass market**?
They are choosing to target the whole market