Learning Aim A - Marketing Flashcards
1
Q
what are the 4 methods of segmenting a market?
A
demographics
geographic location
psychographics
behavioural
2
Q
what does segmenting a market by demographics mean?
A
- sorted by what makes you, you
- examples: age, race, religion, gender, family size
- ethnicity, income, education level, socio-economic groups
3
Q
what goods are segmented by demographics, and for which example?
A
- toys are segmented by age, for example, lego
- hair products are segmented by race, for example, shampoo
4
Q
what does segmenting a market by geographic location refer to?
A
- location can define potential customers
- examples: local or national, warm or cool areas, similar or different cultures, urban or rural customers
5
Q
what goods and/or services are segmented by geographic location?
A
- London prices are expensive due to affluent areas
- Alton towers drinks are expensive as they are the only place to buy a drink from
6
Q
what does segmenting a market by psychographics refer to?
A
- uses personal attributes to group potential customers
- examples: personality characteristics, attitudes, lifestyle, social class
7
Q
what goods and/or services are segmented by psychographics?
A
- travel agents with older customers - refer to cruises instead of active holidays
8
Q
what does segmenting a market by behaviour refer to?
A
- shopping behaviour is used to group you with others according to similar prices
- examples: spending, consumption, rate of usage, loyalty status, desired benefits
9
Q
what goods and/or services are segmented by behaviour?
A
- tesco clubcards collecting data for profits
10
Q
what are the advantages of segmentation?
A
- improves the efficiency in marketing spend and reach
- makes choosing suitable marketing media easier
- means that very specific messages and offers can be made
- can provide a competition advantage over enterprises who do not use segmentation
11
Q
what is a niche market?
A
a small, usually specific target market
12
Q
what is a mass market?
A
a big target market, appeals to lots of customers
13
Q
what is the development stage in the ‘product life cycle’?
A
- stage before any sales are made or before the product is introduced to the market
- research and development may incur significant costs due to product not being for sale yet
- cash flow is negative
14
Q
what is the introduction stage in the ‘product life cycle’?
A
- where the product is actually launches and sales and marketing campaigns begin
- sales typically start slowly for a new product
15
Q
what is the growth stage in the ‘product life cycle’?
A
- sales grow quickly as the product becomes more well known
- sales are quicker at this point
- business starts to make profit
16
Q
what is the maturity stage in the ‘product life cycle’?
A
- where sales reach their peak
- businesses will want to keep products in this stage for as long as possible
- examples of products: coca cola and cadbury dairy milk
17
Q
what is the decline stage in the ‘product life cycle’?
A
- product sales may start to decrease as trends and interests change or technology moves on
- businesses need to make a decision
- questions such as do they remove the product from sale or do they invest in extension strategy to gain more interest in the product
- strategies might include new flavours, colours, packaging/branding etc
18
Q
what does price refer to?
A
- how much you charge for a specific good or service
19
Q
list 5 pricing strategies
A
- penetration
- skimming
- competitive
- cost-plus
- premium
20
Q
what is penetration pricing?
A
- businesses start with an initially low price, and gradually increasing it over a period of time
- examples that use this: food items
21
Q
advantages and disadvantages of penetration pricing?
A
- ADV: low price attracts customers, customers remain loyal after an increase in price
- DISADV: low price means low profits, no guarantee that customers will buy after increase
22
Q
what is price skimming?
A
- start with an initially high price then reduce it over a period of time
- examples that use this: technology
23
Q
advantages and disadvantages price skimming?
A
- ADV: initial demand is expected to be high, high profit
- DISADV: some customers may be unable to afford it
24
Q
what is competitive pricing?
A
- charging a similar price to competitors
- examples that use this: all brands
25
advantages and disadvantages competitive pricing?
* ADV: low price attracts new customers
* DISADV: if charge less, they make less profit per product
26
what is cost-plus pricing?
* involves calculating the cost of making a good or service
* examples that use this: enterprise adds 30% into a water bottle that costs £5.00 to make it = selling price = £6.50
27
advantages and disadvantages cost-plus pricing?
* ADV: guaranteed profit on each sale
* DISADV: if customers are unwilling to match this price, they may have a low number of customers
28
what is premium pricing?
* always keeps the price high
* examples that use this: luxury brands like GUCCI
29
advantages and disadvantages premium pricing?
* ADV: makes them more desirable
* DISADV: unable to get a mass market, customers expect the best
30
what does promotion refer to?
* element of marketing mix relates to the methods an enterprise uses to raise awareness
31
tell me about campaigns
* campaigns must be matched to the aims of enterprises
* has different outcomes per different companies
* aims might be to increase revenue, increase awareness to customers
* examples: charity support, price, promotion, refer to a friend for £15
32
what does advertising refer to?
* persuading or informing customers about products or enterprises
33
what are the promotion methods?
* public relations (PR) or online public relations (OPR)
* social media marketing
* personal selling
* direct marketing
* multichannel marketing
34
what is PR / OPR ( public relations/online public relations ) ?
* PR or OPR usually focuses on maintaining a positive image for an enterprise
* through press releases, building relationships with local communities, sponsorship, or even engaging with influencers
35
PR/OPR affects?
* PR/OPR can improve reputation but it isn't always positive
36
what is social media marketing?
* involves using different social media platforms to market an enterprises goods or services
37
social media affects?
* viral posts can quickly reach audiences
* can be expensive and time consuming
38
what is personal selling?
* involves using salespeople to talk to potential customers
* can be by telephone, video calls, emails or face-to-face
39
personal selling affects?
* salespeople must have good selling skills to effectively generate sales, need to be skilled/knowledgeable
* can be expensive to employ
40
what is direct marketing?
* way of promoting directly to a person or enterprise to generate new business, increase awareness, or make sales
* can be by direct mail/email, social media, phone calls, or SMS
41
affects of direct marketing?
* can build positive relationships w/ customers
* can be ignored / unwanted
42
what is multichannel marketing?
* uses a combination of strategies to engage with the target market
* could be using social media, sales promotions, TV adverts all at the same time which are consistent with eachother in terms of their messaging
43
affects of multichannel marketing?
* more people can be reached through different things
* people see the message more than once in different forms which reinforce it
44
what is above the line marketing?
* a mass media approach for products aimed at a wide spectrum of the market
* examples: radio, TV, cinema, billboards, newspapers
45
what is below the line marketing?
* methods generally cheaper and more focused on the target market
* examples: direct mail, catalogues, social media marketing, tradeshows, sales promotion, personal selling
46
what does place refer to?
* element of the marketing mix deals with where and how a good or service is sold
47
what are the two methods of place?
* direct to the consumer
* indirect to the consumer
48
what is direct to the consumer?
* simplest method of distribution
* an enterprise to sell the products it has made directly to the customer
* examples: Nike selling their products through their personal shop and/or online
49
what is indirect to the consumer?
* an enterprise to sell the products it has made indirectly to the customer via a retailer
* examples: Nike selling products to customers through JD sports
50
what are the factors influencing the choice of marketing methods?
* appropriateness for products and brand image
* speed and accessibility of information
* ease of reaching the target market
* cost to an enterprise
* competitors activities
* experience of an entrepreneur
51
explain speed and accessibility of information
* urgent messages can reach customers very quickly using digital media
* great for weather dependent activities, pop-up shops and hot new releases
52
explain ease of reaching the target market
* enterprises will naturally use methods that are most likely to reach and appeal to their target market
* each segment will be profiled to find out where they are most likely to be looking
* examples: TV, newspaper, social media
53
explain cost to an enterprise
* costs will commonly need to be considered alongside the likely return of investment (ROI)
* local, smaller scale promotional activities may have a lower cost which may suit SMEs
* above the line activities may suit those with bigger budgets or wider audiences
54
explain competitors activities
* competitors activities can influence the marketing strategies of other enterprises
* price cuts may require a similar response
* promotions in a new area need to be copied
* launch of a new product may require similar noise from the others
55
explain experience of an entrepreneur
* an experienced entrepreneur may be able to pull together a shrewd blend of strategies
* less experienced may require trial and error ( and unnecessary costs ) to find the right strategy
* may mean that cheaper strategies appeal more
56
what is brand image and reputation?
* brand image is customers perception on an enterprise based on 4 factors: quality, value, variety, and customer service
* positive brand image will help to attract new customers/retain existing ones whilst negative will do the opposite
57
what is the importance of reputation?
* actions of an enterprise affect public opinions
* opinion will be based on the collective experiences of past and present customers
* opinions could drive online review ratings which could influence customers
58
what are the activities to improve reputation?
* being environmentally friendly
* rejecting unethical/controversial marketing strategies
* responding to customer service issues efficiently
* getting involved in the local communities
59
what does being environmentally friendly consist of?
(6)
* use of recyclable materials
* use of sustainable energy sources
* products designed to be easier to repair at home
* reduce transport/product miles
* recycling all waste
* planting trees/carbon offsetting
60
what does controversial marketing consist of?
* unethical/controversial marketing sends out the wrong signals to customers about goods/services
* can mislead customers
* law provides regulation/codes of practice
* VW group accused of manipulating diesel
* be honest/truthful about goods/services to customers
61
what does customer service consist of?
* good customer service ensures people are happy/feel well looked after, even if something isn't right
* handling returns/complaints/mistakes well is just as important as getting things right
* being recognised for excellent service is good for reputation
62
what does community involvement consist of?
* many enterprises offer to plant trees, support charities, and give something back to society
* smaller enterprises do this best where the impact is immediately felt and seen by customers
