marker research and market mix revision Flashcards
Define marketing mix
Four marketing decisions needed for the effective
marketing of a product. Price, product, promotion and
place (2)
Define Market research
Process of gathering, analysing and interpreting
information about the market [2]
Identify two methods of primary market research that Anouk could use. [2]
Questionnaires/survey, interviews, observations, focus group
Identify two methods of secondary market research. (2)
Government statistics
Newspaper OR magazine articles
Internet OR online sources
Paying for market research agencies
Trade associations reports
Company records
Identify and explain two advantages of market research to Grimshaw. [4]
Advantages could include:
* greater awareness of consumer needs [k] so can adapt its phone/features to match whatcustomers want [app]
* able to forecast likely future trends [k] so can improve focus of new product development[app]
* appreciate the strength of competitors [k] so can change marketing strategy to compete
* knowledge of consumers’ views of company products/image [k] as first time entering
country T [app]
* reduces risks/products launched with more confidence [k] as know what features
customers want [app]
* help gain competitive advantage [k] as can set effective pricing/promotion strategy to suit
country T’s customers [app]
* produce the correct amount of product [k] to avoid wastage of expensive parts [app]
* helps set price [k]
Do you think Ameliaís business would benefit from primary market
research? Justify your answer. (6)
- It is expensive [k] spends a lot on packaging [app] therefore may not be able to afford it [an]
- It is time consuming [k] she has already done secondary research
[app] so how much more can she find out [an] - Collect precise information[k] on sweets [app] so that she can
produce the most appropriate products[an] - Secondary data may be outdated [k] [app]Needs might have
changed [an] - Help better target promotion /in pricing decisions [k] especially as
new business [app]
Identify and explain two possible reasons why GBUís market research might not be useful to the Marketing Director.
ï Wrong / leading questions asked [k] for a mass market product [app]
ï Wrong people asked / not representative [k] as may not buy beauty products [app]
ï Wrong sample size [k] as may need to speak to more than 2000 [app]
Define focus group
Customers who have similar characteristics to the target market who give their opinions on a product / service
Do you think Samira should use secondary research or a focus group
to gather market research information? Justify your answer (6)
Secondary market research:
Low cost way to gain information [k] so money saved can be used for
other purposes [an]
Readily available [k] so decisions can be made quickly [an] about
whether to increase prices [app]
May be out of date [k] which means the information may not be relevant [an]
Focus group
Highly detailed responses OR chance to ask for explanations/follow up questions [k] which could allow her to make more informed decisions [an] such as whether to offer the delivery service [app]
Competitors do not have access to this information [k]
Some group members can influence what others say [k] leading to
unreliable results [an]
High cost [k] which is not helpful at a time when revenue has fallen [app]
Time consuming to set up/carry out [k]
Outline two factors which could affect the accuracy of ABAís market
research.
- Sample selected / type of sample / sample not representative of the
population / how carefully sample drawn up [k] of consumers buying
(short-distance) flights [app] - Wrong sample size / sample too small [k]
- Type of market research / wrong method research chosen / who
carried out the research [k] to collect feedback about customer
experiences [app] - People may not answer truthfully / people say what you want to hear / may not (fully) answer questions [k] leading to the business
choosing the wrong pricing method [app] - Wording of questions / wrong questions asked / poorly written
questions / people do not understand the questions [k] so donít gather
views about sustainable development [app] - Way / how questions are asked by the interviewer [k] as may be used
in 60 countries [app] - Where carry out market research [k]
- Age of the information / data out of date [k]
- Bias [k]
- Time available [k]
Identity and explain two reasons why packaging might be important for HPT (6)
- Protection [k] as (frozen) food could be easily damaged / perish [app]
- Inform [k] could include nutritional information on labels or how to cook the food [app]
- Promotion [k] attractive wrappings could encourage people to buy the food to taste [app]
- Style or colour of packaging could help boost brand image [k] as it could help products
stand out on the shelves [app] - Easier to store [k].
Identify two possible reasons why cameras might have a short product life cycle. [2]
Actions of competitors, fashion/changing tastes, availability of new
technology, availability of substitutes (e.g. phones with camera features).
Define competitive pricing
Setting a price similar to that of competitors products which are already established in the market. [2]
Identify and explain two possible pricing methods that Amelia might
use
penetration pricing [k]
* price skimming [k]
* cost plus pricing [k]
* promotional pricing [k]
* competitive pricing [k]
State two distribution channels a business might use (2).
- Wholesalers
- Retailers
- Direct to customers/Online/Internet/website
- Use of agents
Identify two reasons why good customer service is important for Keypeople. [2]
customer feels valued / good public relations / creates higher level of
customer satisfaction / leads to repeat business (brand loyalty) / can lead to word of mouth recommendations/ motivation of workers/brand image
Anouk could use either leaflets or local newspaper advertising as methods of promoting her jewellery. Recommend which method you think Anouk should use. Justify your answer. [6]
Advertising in local papers:
* Low cost [k] so she will be able to afford this [an] in her $50 budget [app]
* Would widen her target audience [k] as many people read newspapers [an]
* Not everyone reads newspapers [k] so her target audience might not be aware of her business [an]
* Repeat adverts can be expensive [k]. Using up the marketing budget [app].
Leaflets:
* Easy to distribute to lots of people [k] could widen her possible audience [an] to help
increase her sales revenue above $3000 [app]
* Can be kept for reference [k] for when people want to buy rings or bracelets as presents
[app]
* Can be colourful [k] which will attract people’s attention [an]
* People might see them as junk [k] so throw them away [an].
Anyshade’s Finance manager believes that reducing prices is the best way to increase sales revenue. Do you agree? Justify your answer. [6]
- Low prices could make Anyshade more competitive [k] as paint [app] is cheaper than competitors so could increase volume of sales [an] but there is no guarantee that sales
will increase [eval] - Competitors reaction might lead to a price war which could result in fewer sales [k] if rivals
offer better promotions [an] - Price might not be reason why buy [k] as known for quality [app] so lower price might be seen as lower quality so fewer people want to buy [an]
- The business does not know why people buy paint [k] so lower prices might not affect its sales revenue [an]
- It depends on the price elasticity of demand
- Awareness of other issues affecting sales such as promotion, place could be discussed
Do you think cost-plus is the best pricing method for a new business
to use when selling products to a niche market? Justify your answer. (6)
Cost-plus
* Know cost can be covered [k] and can make a profit per item [an]
* Simple and easy to calculate [k] so saves time when setting prices [an]
* Prices may be higher than competitors [k] leading to a fewer sales [an]
* Little incentive to control costs [k] Other pricing methods might include:
* Penetration pricing [k] as setting a lower price than competitors should attract customers [an]
* Competitive pricing [k] but the business will have limited or no control
over the price [an] so may not be able to recover its costs [an]
* Price skimming [k] customers may expect / be willing to pay more in a niche market [an]
* Promotional pricing [k]
Justification might include:
Cost plus pricing is simple and easy to calculate [k] so saves time when setting prices [an]. Although penetration pricing [k] setting a lower price than competitors should attract customers [an]. Cost plus pricing is the best pricing method as covering costs is important for a new business [eval].
Although the price maybe slightly higher this is less important in a niche
market where there are likely to be fewer alternatives [eval].
Do you think competitive pricing is the best method for an established business to use? Justify your answer. (6)
Price will not discourage customers from buying [k] so maintain customer loyalty [an]
Prevents business losing market share [k] which could result in less revenue [an]
Customer may be prepared to pay more (if it is a popular brand) [k]
Need another way to attract customers [k] which could increase costs [an]
May not cover the costs [k] so may find it difficult to break even [an]
Takes time/money to find out competitorís prices [k]
Other methods can be discussed such as:
Cost-plus pricing [k]
Know that the costs will be covered [an]
Know their profit margin / can make a profit per item [an]
Easy to calculate/apply [an]
Does not consider what competitors do / prices may be higher than competitors [an]
Does not take account of changes in demand/spending patterns [an] so could lead to fewer sales being made [an]
Little incentive to control costs [an]
Promotional pricing [k]
Help attract sales [an]
Helps to renew interest in a product if sales are falling [an]
Justification might include:
Competitive pricing will not discourage customers from buying [k] so will buy again [an]. However, if you base your prices solely on competitors, you might not be able to cover costs [k] which makes it difficult for a business to break-even [an]. No, as it depends on what they sell - while cannot ignore what other businesses charge -
especially if it ís a competitive market ñ but if the business has a good reputation which an established business might have [eval] it may be able to use other pricing methods that allow it to charge more [eval].
Identify and explain two methods of promotion (other than promotional pricing) that Mabel might use. [4]
- Free gifts / samples [k] give customers small bottles of shampoo to try [app]
- Demonstrations [k] let people watch whilst she shows possible styles on people’s hair [app]
- Loyalty cards [k] e.g. customers get a free haircut if they visit a set number of times [app]
- Advertising (allow only once) [k] e.g. local paper / radio / television / leaflets to let potential customers know about her new business [app]
- Sponsorship / public relations [k]
- Competitions [k] customers will book appointments to have a chance of winning prizes
[app]
Explain one method of primary market research and one method of
secondary market research Veronique could have used. (6)
Primary market research:
* Questionnaire [k] as provides up-to-date information/specific to her
business [an] about trends for festivals [app]
* Interviews [k] to obtain in depth details/opinions [an] about different type of flowers [app]
* Online survey [k] as more likely to get responses/can reach out to more people [an]
* Focus group [k] as provides detailed information about consumer
tastes/as allows for follow-up questions [an]
* Observation [k] as avoids interviewer bias [an]
* Test marketing [k] so the cost of any problem is limited to a smaller
number of products [an]
Secondary market research:
* Government statistics [k] as being official would provide more accurate
data [an] to help her improve her cash flow forecast [app]
* Online sources/internet research [k] which is low cost/readily available [an] which can be helpful for a new business [app]
* Market research agency reports [k]
* Trade associations/data from similar businesses/commercial data [k]
Identify and explain two possible extension strategies that SENG could use for one of its types of camera.
Add new features/version
* Change colour of camera to suit popular tastes
* Update image with new packaging
* Target new markets or market segments
Define product oriented business (2)
A product orientated company is one that focuses on making a product and then tries to find a market afterwards.
What is meant by a ‘market orientated’ company? [2]
market orientated business is one that produces products in response to the requirements of the customers. Focus is on the market rather than on the product.
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