Management Of Marketing Flashcards
Describe market segmentation.
The breaking down of markets into sub-groups that can be targeted with a specific marketing mix.
Identify the 4 P’s?
Product, price, place and promotion.
Discuss the advantages of market segmentation.
- 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
Describe market research.
The systematic gathering, recording and analysing of data about an organisation’s products and/or services and its target market.
Describe why organisations need to use market research.
- 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.
Identify types of market research.
Primary and secondary research.
Identify the sources of information.
Primary, secondary, internal and external.
Describe ethical marketing.
This is where firms conduct their marketing practices, such as market research, product development and and advertising in a morally responsible manner
Describe examples of poor marketing practice (unethical marketing).
- 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.
Describe desk research.
- 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.
Discuss the advantages and disadvantages of desk research.
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.
Describe field research.
- 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.
Describe the different methods of primary research.
- 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.
Describe the Product element of the marketing mix.
The product element of the marketing mix involves;
• Product Development
• Packaging
• Branding
• Product Life Cycle
Product can also mean service offered.
Describe the three main aims of promotion.
- Persuading: so a consumer purchases the product
- Informing: telling consumers about the product
- Reminding: that the product still exists
Identify the main types of promotion.
Above the line
Below the line
Describe three stages of product development.
-
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.
Describe how can above the line promotion be used.
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
Discuss the advantages and disadvantages to product endorsement.
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.
Describe the development stage of a product.
- R&D of the product, e.g. market research and developing a prototype
- No sales, high costs,no profit
Describe the introduction stage of a product.
- 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
Describe the growth stage of a product.
- Product has gained consumer awareness
- Rapid sales growth and profits begin to grow at a faster rate
Describe the maturity stage of a product.
- Sales move toward a peak, rate of sales growth slows
- High sales and high profits
Describe the saturation stage of a product.
- Sales growth levels out, neither increase or decrease
- Profits and sales at their highest point
Describe the decline stage of a product.
- Still making sales but the begin to decrease, eventually leading to withdrawal from market
- Profit falls with sales, before losses are incurred.
Discuss the advantages and disadvantages to advertising through TV media.
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
Describe how companies extend the maturity stage of the product life cycle.
- 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
Discuss the advantages and disadvantages to advertising through radio.
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.
Describe the definition of a product portfolio.
The range of products a firm produces
Discuss the advantages of a varied product portfolio.
- 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
Discuss the advantages and disadvantages to advertising on social media.
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
Discuss the advantages and disadvantages to advertising on billboards.
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
Discuss the disadvantages to a varied product portfolio.
- 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
Describe the definition of branding.
A brand is a name, symbol, design or combination of these given to a product(s) which is intended to identify the goods produced.
Discuss the advantages of branding.
- 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.
Discuss the disadvantages of branding.
- 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.
Define an own label/brand.
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.
Identify the factors that influence price.
- 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
Describe cost-plus pricing.
- Where a business makes a profit by marking up a product
- Covers cost of production and ensures a profit on each unit sold.
Define Public Relations (PR).
Managing the communication between an organisation and its stakeholders.
Describe competitive pricing.
- The price charged is lower than the price of your competitors
- Encourages customers to buy from you rather than competitor’s
Describe examples of PR.
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.).
Outline different pricing strategies a business uses.
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.
Describe why packaging is important for a product
• 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.
Discuss advantages and disadvantages of using road to distribute goods.
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
State the definition of e-commerce.
E-commerce is the buying and selling of products and services via the internet.
Discuss the advantages and disadvantages of using rail to distribute goods.
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
Discuss the advantages and disadvantages of using sea to distribute goods.
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
Discuss the advantages and disadvantages of using air to distribute goods.
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
Discuss the advantages and disadvantages of e-commerce.
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.
