march 2021 revision - unit 2 Flashcards
what does marketing involve? (4p’s)
- price
- product
- place
- promotion
What information does market research aim to find out?
- age
- economic status (rich, poor)
- culture (motivation and what they enjoy)
- where they live (urban / rural )
- what they want (style, function, large, hot)
Good market research helps a business to be successful and avoid successful and avoid expensive mistakes by finding out:
- product / services wanted
- price willing to pay
- design to be attractive
- how to target customers (media, message)
- where and how to sell ( online, high street etc.)
Any information gathered through market research must be interpreted correctly to:
- understand its significance to the business
- what best meets the needs of their target market
Primary research methods
- questionnaire
- interview
- focus groups
- trialling
Advantages of questionnaires
- cheap
- easy to target customers
Disadvantages of questionnaires
- may not understand questions
- uninterested - may answer dishonestly / not at all
Advantages of interviews
- questions can be explained
- easy to target customers
Disadvantages of interviews
- expensive
- not everybody likes being interviewed
Advantages of trialling
- good way to see if it is liked
- reduces risk
Disadvantages of trialling
- people tested must be representative of whole market
Advantages of focus groups
people chosen will be representative of potential customers
Disadvantages of focus groups
- small group
- usually costly
Advantages of UK census data
- info from almost whole population
- already collected and analysed, reduces costs
Disadvantages of UK census data
- info not specific to business
- needs careful interpretation
Advantages of data from newspapers and magazines
- up to date
- cheap
- good source of ideas
Disadvantages of data from newspapers and magazines
- info not specific to business
Advantages of data from websites
- cheap
- helps decision making on products/services and prices
Disadvantages of data from websites
- careful interpretation needed
Advantages of internal data
- cheap
- readily available
- specific to business
Disadvantages of internal data
- old data (what HAS happened not WILL happen)
what does a business need to consider when segmenting market
- price
- promotion of products
- location of shops
- product differentiation
Ways of segmenting a market are
- age
- gender
- income
- lifestyle
- location
what are the processes involved in producing a product/service
- design
- invention
- innovation
what is design of a product
planning of what a product will do (its function) and its style
What is the invention of a product
a totally new product /service
what is innovation of a product
improving an already existing product
What are the 4 point of sale promotions
- price reductions
- competitions
- loss leaders
- free samples
What are price reductions (‘sales’)
- a way to sell off old stock (new season or old models)
- will make less profit ( loss ) than of sold at higher price
What is competition in point of sale promotion
A person who buys a product is also entered into a competition, e.g voucher for free holiday included in crisps.
What is loss leaders
Goods are sold at a loss to encourage customers to come to the shop in the hope they will do all their shopping there. E.g Tesco may sell petrol cheaply to attract customers & will make profits on the groceries those customers by
What are free samples
Tempt people to buy the product, e.g customers may be offered small pieces of cheese in a supermarket so they can try it
What are different types of advertising
- social media
- websites
- TV
- print media
- radio
Advantages of social media as a way of advertising
- cheap (not free)
- customers more likely to take notice as they have shown an interest (follwed)
disadvantages of social media as a way of advertising
- hire someone to operate it
- needs updating
- not everyone uses it
Advantages of websites as a way of advertising
- send particular messages to buyers
- videos/diagrams to show detail of product
disadvantages of websites as a way of advertising
- costly to keep up to date
advantages of using tv as a way of advertising
- reach wider audience
- know what channels & programmes potential customers watch
disadvantages of using tv as a way of advertising
- expensive
- only suitable for larger businesses
advantages of using print media as a way of advertising
- local newspapers are low cost and reach one area
- national newspapers reach a wider range of audience
- magazines are ideal to target its market (through interests)
- leaflets can be targeted at correct customers
disadvantages of using print media as a way of advertising
- not many people reed newspapers
- leaflets are often ignored
- national newspapers are expensive
advantages of using radio as a way of advertising
- reach large audience
- cheaper than tv advertising
- portable so can listen anywhere
disadvantages of using radio as a way of advertising
- product cannot be seen
- listeners may skip adverts
What will a business by influenced by when promoting a product
- what the business can afford
- the target audience - who and how many
- aim of promotion - sell of old stock, tempt new customers etc.
Advantages of channel 1 of product distribution
by missing out wholesalers and consumers, the producer makes more profit, rather than sharing it with the wholesaler and/or retailer
Advantages of channel 2 of product distribution
Directly to retailer means the producer can benefit from keeping some of the profit that would have been made by the wholesaler, while being confident the retailer will able to market the goods to customers
Advantages of channel 3 of product distribution
A wholesaler can break up bulk stock and offer retailers the goods in the quantities that they can afford, and which they can sell, so more retailers are willing to sell the goods
When making decisions about the marketing mix, businesses must consider
- type of product
- cost
- stage of product life cycle
- target market
- funds available
What will happen to the product during the introduction of the life cycle
will be introduced
What will happen to the product during growth of the life cycle
- product will not change
- process of innovation and designing a new model will begin
What will happen to the product during the maturity of the life cycle
- new styles to attract a wider range of customers
- continue designing and development process
What will happen to the product during the decline of the life cycle
- new features introduced
- ready to introduce a new model if sales can no longer be extended
What will happen to the price of a product during the introduction of the life cycle
- price skimming
What will happen to the price of a product during the growth of the life cycle
- reduce price (maintain sales)
What will happen to the price of a product during the maturity of the life cycle
- maintain a stable price
What will happen to the price of a product during the decline of the life cycle
- promotional ‘reduced’ pricing (to extend sales)
What will happen to the place of the product during the introduction of the life cycle
- sell through exclusive shops to stress product’s quality and to be able to sell at a high price
What will happen to the place of the product during the growth of the life cycle
- sell through a wider range of shops
- sell online to increase custom
What will happen to the place of the product during the maturity of the life cycle
- continue sales through a wide range of outlets
What will happen to the place of the product during the decline of the life cycle
- continue sales through a wide range of outlets but reduce sales in outlets that aren’t selling as many
What will happen to the promotion of a product during the introduction of a product
- use targeted advertising to generate interest in the product
- stress the quality & exclusivity to people who are interested in the product range
What will happen to the promotion of a product during the growth of a product
- advertise widely to stress the benefits of the product to a wider market
What will happen to the promotion of a product during the maturity of a product
- continue to advertise to highlight differences of the product to its competitors
What will happen to the promotion of a product during the decline of a product
- advertise to raise awareness of price reductions
- give special offers to encourage sales
it is possible to judge the effectiveness of a marketing mix by asking the following questions:
- have the total sales increases and if so, by how much?
- has the stock of the products been sold off?
- has the business been able to increase the price or has it been reduced?
- has the number of people who buy the product/service increased and if so, how many
