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LC Business Studies > Marketing 1 > Flashcards

Marketing 1 Flashcards

1
Q

What is Marketing?

A

Management process of finding out what customers want, making a product that will satisfy their needs and persuading them to buy it. Identifying and anticipating what consumers want today and will want in the future

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2
Q

What is Market research?

A

The systematic collection, analysis and reporting of information about marketing issues to enable managers to make effective marketing decisions. Helps in identifying and anticipating what consumers want today and will want in the future

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3
Q

What are the two ways to do market research?

A

Field Research

Desk Research

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4
Q

Explain field research

A

Primary research - Involves business going out into the marketplace and collecting information from consumers. Obtaining the answers first-hand from consumers

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5
Q

Name 3 methods of field research

A

Observation
focus groups
surveys

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6
Q

Explain Observation as a method of field research with example

A

Researchers watch customers in action and learn from how they behave and react in situations
Usually researchers do not tell consumers they are watching as they may behave differently if they knew
Supervalu has improved the layout of their stores to maximize sales when researchers watched consumers to fin what prompted them to buy a product

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7
Q

Explain Focus groups as a method of field research with example

A

Small group of consumers brought together to discuss their opinions on the business and their products.
Aims to capture feedback
Moderator starts discussion gets others to offer opinions
Nature of group, one contribution sparks another is effective in gaining helpful insightsfor business
Ex: Vodafone hold groups where it listens to volunteered consumers who share how they think they could served better

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8
Q

Explain surveys as a method of field research

A

Researchers interview a sample of customers directly asking questions and recording the answers given
Aim to find what people think and how many share that same opinion
Can be done by phone, face-to-face or on internet
ex: Lily o Brien’s chocolates include a survey in each box of chocolates asking consumers to rate each box on a scale of average to I love it

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9
Q

Explain the advantages of field research

A

Specific to business / product- precisely relevant. Business gets answers it need to q’s it wants answered from target market specifically
Business owns information- does not have to share and gives Competitive advantage.
Control over research process- assured that research will be done correct and info will be accurate. Reliable
Immediate up to date info- Info about what is happening right now. Provides recent up to date data of market

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10
Q

Explain the disadvantages of field research

A

Expensive-involves high cost. Surveys to be compiled, distributed. Interviewers to be paid.
Can take a long time- Requires development and execution of research plan. from decision to enter project to end point with answers is longer time.

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11
Q

Explain desk research

A

Using information that someone has already gathered-secondary research. Information already exists so business does it have to collect it first hand

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12
Q

Name three forms of desk research

A

internal reports
government publications
internet

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13
Q

Explain Internal reports as a method of desk research

A

Reviewing information from previous sales and financial reports produced by company
Can show what popular products were, most successful shops
ex: Brian lee of “freshly chopped” looks at daily sales to establish how each outlet is performing and the popularity of each product

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14
Q

Explain government publications as a method of desk research

A

Businesses can use publications produced by government bodies (e.g CSO) for info about a market
Government produce range of info that people can buy or obtain free ex: census, household budget survey
EX: Enterprise Ireland has database containing export trade info. Helps Irish business to identify opportunities to export its products

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15
Q

Explain Internet as a method of desk research

A

Freely available information from the web on any topic
Type topic into search engine to find info/research
Websites or discussion groups/forums are important sources of information for market researchers
ex: Cadburys wanted to know how people liked their creme eggs, they could look on threads on websites such as boards.ie under creme eggs

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16
Q

Explain the advantages of desk research

A

Cheaper than field- many sources free, keeps costs down
Quick and easy- quicker mean business address marketing issues faster- Internet particularly quick
Variety of information- lots of data to make effective decisions. Internet/extensive government reports
A good starting point for market research
Starting point for Primary research- ex: manager doing analysis of competition could access internet to locate a list of potential competitors

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17
Q

Explain the disadvantages of desk research

A

May be inaccurate- no control over accuracy. conductor my have made mistakes. less accurate/reliable
Information may be out of date- Market could change drastically since research- little use in decision making
Competitors can also access information- freely available. no particular competitive advantage

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18
Q

What is the importance of market research for a business

A

Can save the business money in the long run
Reduces the risk of failure for product and the business
Helps identify new markets
Helps to identify threats

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19
Q

Explain market segmentation with example

A

Dividing the overall market for a product into distinct groups of consumers
Consumers within segments have similar needs and common characteristics different from other segments
Ex clothing market can be divided into male and female segments

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20
Q

Explain Geographic segmentation with an example

A

Market is divided into different geographical areas Business makes money satisfying local needs
e.g county radio stations, stations are no. 1 in their region as people listen to news on their community that national stations cannot do

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21
Q

Explain demographic segmentation

A

Market is divided into different characteristics of the population e.g gender - ‘Nivea for Men’ and NIVEA range for women

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22
Q

What are the advantages of market segmentation

A

Allows business to get established in a market
Helps increase sales
Lowers marketing costs

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23
Q

Explain target market with example

A

A precise description of the types of customer a business aims its product at
The specific segment within market for a product that a business wishes to target
Ex: Penneys target market is budget-conscious consumers

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24
Q

Explain with example niche market

A

A small group of potential customers within a market segment for a product
They have more specialised needs to the rest of the market
Willing to pay dearer price
Ex: A niche market within the female shoes segment would be bridal shoes

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25
Q

What are the advantages of niche marketing - explain

A

Less competition- highly specific product means there will be less businesses out there with the same offering. reduced competition allows for higher prices
Lower marketing costs- business only has to develop one campaign to appeal to the particular niche market ex: bridal shoe maker only advertises in bridal magazines and wedding fairs

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26
Q

What is the marketing concept with example

A

The marketing concept states that the customer is the most important person to the business.
Keeping the customer happy is the way to make money.
The business must make products that satisfy the needs of the customers.
ex: Brown Thomas offer excellent products and service including personal shopper. They enjoy high sales

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27
Q

Explain the Benefits of satisfied customers to the business

A

Increased profits- customers are happy and buy more
Good reputation-tell friends about hos business is good, free form of advertising
Reduced business costs- no reason for complaints so fewer returns and repairs reducing business costs

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28
Q

Explain marketing plan

A

It takes the stated aims and objectives from the business plan and puts in place marketing activities to ensure those objectives are met Ex: coca cola sugary soft drinks in decline so they worked on developing more no sugar drinks coke zero

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29
Q

Explain the four steps of a marketing plan

A

1: Investigate market to develop business opportunities-SWOT analysis, find gap to fill in market to make money
2: Select a target market- split into segments and target one/few of these
3: Research target market- find what consumers want and need
4: Develop a marketing mix- develop four strategies. Good product at the right price on sale in all the places the target market shops. Must promote it in a way that appeals to them

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30
Q

Explain the benefits of a marketing plan

A

Sets out strategies - Acts as map guiding business to increased sales and profits
Helps to control progress - allows business measure actual performance against the goals set in plan. can get back on target
Helps raise finance - show investors the business has done its research. Persuade investment

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31
Q

Explain marketing strategy

A

A marketing strategy is a written plan that sets out the business’s marketing objectives and the means by which it will achieve these

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32
Q

What is the marketing mix

A

Consists of four tools that a business can use to persuade customers to buy its products
Product, place, price, promotion

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33
Q

Define a product

A

A bundle of benefits that satisfies the needs or wants of consumers
Physical good or services

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34
Q

Explain with example brand name

A

A brand name is when a business gives its product a name/ design and/or symbol to make it easy for customers to identify it and make it stand out ex: coca-cola

35
Q

What are 5 benefits of brand names

A 
Higher Price
Increase in Sales 
Brand Loyalty 
Increase Product Line
Power
36
Q

Explain own brand products with example

A

Own brand products carry the name of the shop that sells them or a name developed for the shop and not the manufacturer that makes them ex: Tesco finest

37
Q

Explain 4 benefits of own brand products for a retailer

A

Lower Priced Products- compete with discount stores attracting budget conscious consumers
Competitive Advantage- not available anywhere else ex: M&S own brand is very popular
Discount from Manufacturer- extra business for manufacturer, bigger economies of scale, no development of brand
Bargaining Power- less room in store, supplier compete for shelf space

38
Q

What is product design

A

Creating a product which is attractive, appealing to customers and works well.

39
Q

Explain what a good product design has with examples

A

Good Aesthetics - loos appealing ex: new model of car would change the bodywork and interior but not necessarily the engine
Function - does what it intended to do. ex: Car manufacturer confident in design so gives warranties
Cost-Effectiveness - mad for reasonable cost. Good design focuses on manufacturing issues at early stage

40
Q

Why is good product design important (benefits)

A

Increases sales- customers want well designed product that look good and easy to use and maintain.
Reduces costs-work excellently and do job intended so business minimise amount of money spent recalling and repairing badly designed products or giving refunds
Saves time- Good design focuses on manufacturing issues at early stage so product sare easy and cost effective to manufacture

41
Q

Why is product packaging important? 5 reasons

A 
Increases sales
Protection of the product
Information about the product
Image
Convenience
42
Q

Explain the stages of the product life cycle

A

Introduction- First launches, high cost on promotion but little competition. No profit.
Growth- Sales of product grow rapidly. Proved success with initial customers. Competitors enter market
Maturity- rate of sales slows but still rises. sales of product reach highest level. Large profits
Saturation- Sales remain at peak for some time but don’t grow and further. everyone who wants product has it. market is full of similar products. Making a lot of money.
Decline- Sales of the product fall off permanently . Consumer taste change or product is obsolete. Product withdrawn from market

43
Q

Explain price as part of marketing mix

A

Amount of money the business charges a consumer for a product. Too high consumer will not be able to afford product. Too low Business will not profit from it

44
Q

What factors must a business consider when choosing a price for a product

A

The cost of the product
Competitors prices
Consumers / Target Market
Legal regulations

45
Q

Explain price skimming strategy

A

The business charges a high price for its product when it first comes out and then reduces the price as it goes through the product lifecycle wit new competition
Certain consumers pay anything for latest product
Makes a lot of money
Ex: new iPhone or games console

46
Q

Explain penetration pricing strategy

A

The business charges a lower price than competitors in order to undercut competitors
Persuades consumers to switch over as soon as possible
Ex: BordGáis charged 10% to 14% less than competitor ESB to attract consumers. since a lot have switched.

47
Q

Explain price discrimination strategy

A 
The business charges different customers different prices for its product
Different people can afford different amounts
Ex: first class plane seats vs. economy class- a lot of people willing to pay more for extra comfort and exclusivity
48
Q

Explain loss leader

A

The business sells one product for less than they paid for it with the hopes of attracting customers to buy more expensive products for them.
They hope consumers will engage in impulse buying and buy more products.
Increase sales

49
Q

Explain premium pricing

A

The price of the product is at, or near, the high end of the possible price range with the view to attracting status-conscious consumers
Enhances products luxury image- indicates good quality
Ex: Rolex, Cartier

50
Q

Explain break even price

A

Minimum price a business must charge for its product.
Money earned from selling is equal to the cost of making it
Total Revenue = Total Costs

51
Q

Explain break even point

A

Number of products a business must sell just to cover its costs
It makes neither a profit or a loss if it sells this number

52
Q

Explain two categories of business costs and explain

A

Fixed Costs - these never change, regardless of how many products the business makes and sells e.g rent
Variable Costs - these increase or decrease as number of products made and sold increases or decreases e.g raw materials

53
Q

Explain margin of safety

A

Difference between a business’s forecasted sales and its breakeven point
It shows by how much sales can fall before the business starts to make a loss

54
Q

What are the benefits of break even analysis

A

Identifies when profits will occur
Highlights feasibility of a product / service
Shows the margin of safety
Highlights importance of keeping fixed costs low

55
Q

What are the limitations of breakeven analysis

A

Assumes selling price never changes
Only shows analysis for one product
Assumes sales and output are the same
Assumes variable costs stay the same

56
Q

Explain saving business money in the long run as an importance of market research with example

A

Avoids wasting money on making products no one will buy. Ideas that get unfavorable reaction in consumer surveys are not developed further.
Ex:To win back market share from Pepsi coca cola decided to launch “New Coke” to replace its original recipe. Product was withdrawn as coca cola wasted millions of dollars because of lack of market reach

57
Q

Explain reduced risk of failure for the product and business as an importance of market research with example

A

Helps identify what consumers want today and in future
Business make products that consumers want and they likely sell well
Ex: Spin1038 conducted market research hat showed young people disliked advertisements and DJs talking too much. They introduced “ten spin hits in a row”

58
Q

Explain identifies new markets as an importance of market research with example

A

Business can discover new products and services consumers would like which are not on sale.
Use the info to make such products to increase sales and profits
Ex: coca cola obtained desk research that showed growth in no. of smaller households. They launched a new 1.25l bottle of coke to satisfy market segment

59
Q

Explain helps identify threats as an importance of market research with example

A

Identify threats and competition to business.
Business can take action to neutralise threats
ex: Consumption of sugary soft drinks in decline coca cola conducted reach and found 50% of consumers didn’t know coke zero contained no sugar. The renames brand as coke zero sugar to increase sales

60
Q

Explain get established in a market as an advantages of market segmentation with example

A

business gets foothold in market starting in one segment
grows over time to enter more and more segments
ex: Newstalk started in Dublin segment of radio market until it had money and reputation to go nationwide

61
Q

Explain lower marketing costs as an advantages of market segmentation with example

A

No wasting money on different campaign to appeal to lost of different customers.
Business only has one campaign to appeal to the particular market it sells to,
ex: Christian Louboutin targets premium high income segment of the shoe market in marketing

62
Q

Explain Increase sales as an advantages of market segmentation with example

A

When business segments market and offers a marketing mix to a previously neglected segment it can make massive sales.
Ex: NIVEA’s sales rocketed with range for men

63
Q

Formula for break even point in units

A

fixed costs / (selling price - variable costs)

64
Q

Formula for break even point in euro

A

BEP in units x selling price

65
Q

Formula for margin of safety

A

forecast sales in units- BEP in units

66
Q

Explain higher price as a benefit of branding with example

A

Can charge higher price increasing profit
Branded goods thought to be better quality- willing to pay more
Ex: Kerrygold can charge a bigh price over competitors as poeple consider it to be quality Irish brand.

67
Q

Explain Increased sales as a benefit of branding with example

A

When consumer know a brand i makes it easier for them to buy the product - it sells itself
Business does not have to try sell or push products
Ex: Irish person holidaying abroad looking for butter will instantly recognise Kerrygold and buy it. trusted

68
Q

Explain brand loyalty as a benefit of branding with example

A

Consumer form attachment to brand - stick with product
gives competitive advantage over its competitors
Ex: Even if other butter drop prices Kerrygold customers will stay with that brand because they have a life long affinity with it

69
Q

Explain launching new products as a benefit of branding with example

A

Easy to launch products under same name as consumers will accept it readily.
They trust the name and reputation
Ex: Kerrygold capitalised on their name to sell range of cheeses and powdered milk in addition to butter

70
Q

Explain Power as a benefit of branding with example

A

Gives business power over shops. The business can command a good deal from shops because customers may stay away from shop if they don’t stock the brand
Ex: Kerrygold gets excellent shelf space in supermarket and doesn’t have to offer them massive discounts fr this reason

71
Q

Why is packaging important for the reason of increased sales? With example

A

Consumers first point of contact with product is packaging
Must be eye catching and attractive - helps sell
Ex: Coca cola packaging featuring the slogan “share a coke with” followed by a different names helped increase sales

72
Q

Why is packaging important for the reason of convenience With example

A

Business can put products in to different size packaging for customers to use in different situations.
Ex: Coca cola produce a 2L bottle for fmailies and a 1.25L bottle for smaller hosueholds

73
Q

Why is packaging important for the reason of image With example

A

Packaging is used to display the product in an certain image
Reinforces the idea its a luxury, prestigious product perhaps, ex: Rolex watch is in luxurious box
Enforces quality of product

74
Q

Why is packaging important for the reason of information With example

A

Info printed provides details of the contents of product
Teaches how to use product successfully
Ex: Kellogg cereal shows ingredients, vitamins, sell by date and who to contact with problems about product

75
Q

Why is packaging important for the reason of protection With example

A

Protects product in transport by manufacturer and in storage
Reduces breakages and deterioration cost for business
Ex: Tetra Pak packaging makes sure liquids do not spill from juice and mil cartons

76
Q

Explain how to extend the product life cycle in terms of the marketing mix specifically product. Use an example

A

Bring out new improved version of product
Extra benefits/features reawakens customers jaded interest init, sales are maintained
Ex: Car manufacturers will improve mature models adding power steering or leather seats and alloy wheels

77
Q

Explain how to extend the product life cycle in terms of the marketing mix specifically price. Use an example

A

Drop price during saturation stage
Motivates budget conscious consumers who have not yet bought the product to purchase it- more sales
Ex: Older Iphones drop as new ones are released

78
Q

Explain how to extend the product life cycle in terms of the marketing mix specifically promotion. Use an example

A

Promote it in a different way
Re position it by publicizing new uses for product
Ex: Lucozade used to be considered a drink for sick people in hospital. So company relaunched it and promoted it as a drink with benefits to sportspeople

79
Q

Explain how to extend the product life cycle in terms of the marketing mix specifically place. Use an example

A

Distribute it to consumers in a new way
Sell to consumers online to attract consumers from all over the world
Ex: to extend sales of movies after they leave the cinema film companies make it available on paid movie channels and then on DVD or Blu ray

80
Q

Explain how cost of product is a factor to consider when choosing a selling price for a product

A

Must be at least equal to total cost of manufacturing and selling product.
If charges less than breakeven price it will make a loss

81
Q

Explain how competitors prices of product is a factor to consider when choosing a selling price for a product

A

If competitors product is better business must charge a lower price
If competitors product is inferior the business can charge a higher price
If competitors product is similar must charge a similar price

82
Q

Explain how consumers of product is a factor to consider when choosing a selling price for a product

A

Business must know customers price range
Price is determined by how much the customers can afford to pay for it.
Luxury vs necessities
Ex: during economic downturn hotels dropped prices to entice consumers to spend

83
Q

Explain how legal regulations of product is a factor to consider when choosing a selling price for a product

A

Government taxes like excise duties and VAT increase price

Government in some cases can set max or min price a business can charge for a product also

LC Business Studies (28 decks)

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