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National 5 Business Management > Management Of Marketing > Flashcards

Management Of Marketing Flashcards

1
Q

Describe market segmentation.

A

The breaking down of markets into sub-groups that can be targeted with a specific marketing mix.

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2
Q

Identify the 4 P’s?

A

Product, price, place and promotion.

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3
Q

Discuss the advantages of market segmentation.

A
  • Product: tailor product to target market needs
  • Price: offer affordable products/services to your target market
  • Place: use appropriate distribution channel (eg: Heinz can use retailer function for max customer reach)
  • Promotion: Avoid wasting money on untargeted advertising
  • Identifies market gaps
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4
Q

Describe market research.

A

The systematic gathering, recording and analysing of data about an organisation’s products and/or services and its target market.

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5
Q

Describe why organisations need to use market research.

A
  • Anticipate changes in the market.
  • Identify changes in customer tastes
  • Identify who is buying the product
  • Identify new opportunities or products
  • Keep ahead of competitors
  • Ensure product/services are meeting consumer requirements.
  • Identify if the promotion is appropriate
  • Ensure products are at the correct price
  • Ensure products are being sold in the right place.
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6
Q

Identify types of market research.

A

Primary and secondary research.

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7
Q

Identify the sources of information.

A

Primary, secondary, internal and external.

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8
Q

Describe ethical marketing.

A

This is where firms conduct their marketing practices, such as market research, product development and and advertising in a morally responsible manner

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9
Q

Describe examples of poor marketing practice (unethical marketing).

A
  • Obtaining market research information without the consumer agreeing to it. Eg: CCTVs in changing rooms
  • Selling private information about customers. Eg: from a bank or health records to insurance companies
  • Companies agreeing to set an artificially high price for a product. eg: airlines charging insanely high flight prices
  • Making false claims in an advert.
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10
Q

Describe desk research.

A
  • Carried out by a researcher using secondary information in the form of published sources (e.g. government reports, trade journals, financial papers, profit and loss accounts)
  • Originally produced by someone else other than the researcher.
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11
Q

Discuss the advantages and disadvantages of desk research.

A

Advantages

  • There is a wide range of sources to access, so decisions should be more informed
  • The information is often cost effective to collect
  • Competitors’ information is available to access so the firm has a fuller understanding of the whole market
  • Saves the firm alot of time carrying out the research if the information has already been collected, which frees up time for analysis of the data

Disadvantages

  • As competitors get access the information is not unique
  • The information can be out-of-date
  • It can be difficult to test the accuracy of the information
  • The information may contain bias such as an one-sided political opinion and so is misleading.
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12
Q

Describe field research.

A
  • This is carried out by a researcher ‘in the field’ to obtain first-hand, specific information for an organisation to use.
  • The researcher goes out into the market and obtains the information her/himself.
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13
Q

Describe the different methods of primary research.

A
  • Focus group: led by a chairperson to encourage open discussion with selected participants.
  • Telephone survey: involving a market researcher phoning people at home and asking questions
  • EPOS: information about customers’ buying habits recorded by computerised system at till
  • Test Marketing: launching a new product in a regional area. If successful, it is launched nationally.
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14
Q

Describe the Product element of the marketing mix.

A

The product element of the marketing mix involves;
• Product Development
• Packaging
• Branding
• Product Life Cycle

Product can also mean service offered.

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15
Q

Describe the three main aims of promotion.

A
  • Persuading: so a consumer purchases the product
  • Informing: telling consumers about the product
  • Reminding: that the product still exists
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16
Q

Identify the main types of promotion.

A

Above the line

Below the line

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17
Q

Describe three stages of product development.

A
  • Generation of ideas
    • Brainstorming and market research, identify target market
  • Test product
    • Making sure products are functional, safe, reliable and fit for purpose
  • Apply for patent/trademark
    -To ensure competitors do not copy the product.
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18
Q

Describe how can above the line promotion be used.

A

Informative Adverts: used to increase awareness of the product/service and to inform the customer about the product/service

Persuasive Adverts: used to persuade customers to buy a product, emphasising it’s desirability.

Product Placement: when a firm pays for it’s product to be used in films or T.V. programmes

Product Endorsement: when celebrities are paid to wear and use a companies products

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19
Q

Discuss the advantages and disadvantages to product endorsement.

A

Advantages

  • People want to buy products associated with the celebrity
  • As the celebrity succeeds then so can the product

Disadvantages

  • Can be a very expensive method of promotion
  • Celebrity chosen has to match the image of the product
  • Negative publicity from the celebrity can damage the reputation and sales of your product.
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20
Q

Describe the development stage of a product.

A
  • R&D of the product, e.g. market research and developing a prototype
  • No sales, high costs,no profit
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21
Q

Describe the introduction stage of a product.

A
  • Product is launched onto the market. Heavy advertising and sales will begin to rise
  • Sales are low and costs are high. Revenue used to pay high costs of R&D, so no profit
22
Q

Describe the growth stage of a product.

A
  • Product has gained consumer awareness
  • Rapid sales growth and profits begin to grow at a faster rate
23
Q

Describe the maturity stage of a product.

A
  • Sales move toward a peak, rate of sales growth slows
  • High sales and high profits
24
Q

Describe the saturation stage of a product.

A
  • Sales growth levels out, neither increase or decrease
  • Profits and sales at their highest point
25
Q

Describe the decline stage of a product.

A
  • Still making sales but the begin to decrease, eventually leading to withdrawal from market
  • Profit falls with sales, before losses are incurred.
26
Q

Discuss the advantages and disadvantages to advertising through TV media.

A

Advantages

  • Can target advert to reach viewers of a show
  • Reaches a global audience
  • High impact with the visuals
  • easier to remember

Disadvantages

  • Expensive to make and show
  • Target audience may NOT be watching
  • Message is short-lived
  • Viewers channel surf
27
Q

Describe how companies extend the maturity stage of the product life cycle.

A
  • Improve the product - Manufacturers will often produce, what they claim to be, new and improved versions of their products
  • Change the packaging - To appeal to a different market segment
  • Change the channel of distribution - e.g. the introduction of internet shopping
  • Change product prices
  • Change the promotional activities
  • Change the use the customers have for the product
  • Rebrand the name of the product
  • Produce line extensions
28
Q

Discuss the advantages and disadvantages to advertising through radio.

A

Advantages

  • Cheaper to advertise than TV
  • Can target advert to reach listeners of a show

Disadvantages

  • Seen as “audio wallpaper” and so listeners don’t change the channel as much
    Can’t show a new product and so have to rely on a listeners imagination.
29
Q

Describe the definition of a product portfolio.

A

The range of products a firm produces

30
Q

Discuss the advantages of a varied product portfolio.

A
  • It can appeal to different market segments
  • It can have a more well known profile
  • It can increase potential sales revenue
  • It may dominate the market
  • Helps an business cope with products that are only demanded during certain seasons e.g. Creme Eggs
  • Risk of business failure is spread
31
Q

Discuss the advantages and disadvantages to advertising on social media.

A

Advantages

  • Can reach a global audience
  • 24/7 advertising possible
  • Customers can express their response to the ad eg “like” on Facebook

Disadvantages

  • Message can be short-lived
  • Customers can “skip ad”
  • Ad can be ignored as the customer is reading something else
32
Q

Discuss the advantages and disadvantages to advertising on billboards.

A

Advantages

  • Captures audiences whilst at traffic lights
  • Has high impact as the image is of a large size

Disadvantages

  • Billboards can deteriorate with weather and so image suffers
  • Can be vandalised and so image is, again, reduced
  • Only writing and minimal movement and so impact is reduced
33
Q

Discuss the disadvantages to a varied product portfolio.

A
  • Costs of promoting and advertising lots of different products, therefore could impact profits
  • If one product receives a bad reputation or image this might impact on all the products being sold in the business
  • Maintaining a varied product portfolio will involve a cost of R&D
  • Costs of purchasing machinery and maintain it for different types of products
  • Staff require training on various features of products can be time-consuming and expensive
34
Q

Describe the definition of branding.

A

A brand is a name, symbol, design or combination of these given to a product(s) which is intended to identify the goods produced.

35
Q

Discuss the advantages of branding.

A
  • Easier to launch new products with the same brand name.
  • Higher prices can be charged.
  • Customers may become brand loyal
  • Brand manufacturers can save money on marketing.
36
Q

Discuss the disadvantages of branding.

A
  • Can be susceptible to copies or fakes
  • One poor brand could affect the whole range of products produced by the company.
  • Advertising, R&D costs can be high to maintain a high profile public image.
37
Q

Define an own label/brand.

A

An own label/own brand refers to a retailer’s own product which may be the retailer’s own name.
- Tend to require little advertising.
- Tend to be less expensive (good during an economic downturn).
- May be seen to be of inferior quality to the branded product.

38
Q

Identify the factors that influence price.

A
  • Competitors’ prices
  • Cost of production
  • Profit expected
  • Market segment the product is aimed at
  • The place the product is sold
  • The state of the economy
39
Q

Describe cost-plus pricing.

A
  • Where a business makes a profit by marking up a product
  • Covers cost of production and ensures a profit on each unit sold.
40
Q

Define Public Relations (PR).

A

Managing the communication between an organisation and its stakeholders.

41
Q

Describe competitive pricing.

A
  • The price charged is lower than the price of your competitors
  • Encourages customers to buy from you rather than competitor’s
42
Q

Describe examples of PR.

A

Improving the image of the product and organisation

Supporting and promoting a charity

Sponsoring sporting or cultural events

Product endorsement by celebrities

Press conferences and press releases in times of difficulty or when good publicity can be obtained

Company visits – arrange and host members of the public around the business

TV/radio:appearance

Sponsorship (e.g. local football team)

Provide company merchandise (pens, mugs etc.).

43
Q

Outline different pricing strategies a business uses.

A

Loss leader pricing: Firm will lower certain prices of products so they make a loss on them, to entice customers into buying products that make profit.

Penetration pricing: a low price is charged for a new product. Once that product gains traction and loyalty, the company will increase price.

Promotional pricing: company lowers product price for limited time. After gaining popularity and customer loyalty, prices will increase again.

Skimming pricing: high price charged for unique product. Once competitors enter market, prices are decreased to match them. Allows for max profitat the start.

44
Q

Describe why packaging is important for a product

A

• protecting products from being damaged during transportation;

• helping to keep products fresh

• providing legally required information, e.g. nutrition.

• packaging will be designed to reflect product branding, e.g. choice of colours and fonts;

• packaging will be designed to appeal to the target market, e.g. choice of images and materials.

45
Q

Discuss advantages and disadvantages of using road to distribute goods.

A

Advantages
• The only method which allows for direct door-to-door delivery
• A relatively quick and cheap method for delivering across short distances

Disadvantages
• Traffic jams and bad weather can cause delays
• Only transports a relatively small quantity of goods

46
Q

State the definition of e-commerce.

A

E-commerce is the buying and selling of products and services via the internet.

47
Q

Discuss the advantages and disadvantages of using rail to distribute goods.

A

Advantages
• Large quantities of goods can be transported
• Relatively environmentally friendly

Disadvantages
• Distribution is limited by where there are stations to stop at
• Goods still have to be transported to the customer from the train station

48
Q

Discuss the advantages and disadvantages of using sea to distribute goods.

A

Advantages
• A much larger quantity of goods can be transported around the world than a plane
• Cheaper than air travel

Disadvantages
• Very slow compared to air travel
• Goods still have to be transported to the customer from the port

49
Q

Discuss the advantages and disadvantages of using air to distribute goods.

A

Advantages
• The quickest method for transporting goods globally
• Planes can reach some parts of the world that other methods cannot

Disadvantages

• Very expensive
• A very high carbon footprint
• Goods still have to be transported to the customer from the airport

50
Q

Discuss the advantages and disadvantages of e-commerce.

A

Advantages

  • Consumers across the world can buy from the business, which results in increased customers.
  • Customers can buy at whatever time is most convenient to them, which will increase sales.
  • Businesses do not pay rent or buy fixtures and fittings for physical premises, which reduces costs.
  • Websites can display an unlimited number of products, which improves customer choice + satisfaction.

Disadvantages

  • Customers cannot see or handle products before buying them, which result in businesses spending a lot of time processing returns and refunds.
  • There are high initial costs in creating a high-quality website
  • Increased competition as businesses now have to complete with online competitors across the world, which could result in a loss of customers.
  • Ongoing maintenance and updates of websites and associated technology can be expensive.

National 5 Business Management (4 decks)

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