Marketing 1

Question 1

What is Marketing?

Answer 1

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

Question 2

What is Market research?

Answer 2

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

Question 3

What are the two ways to do market research?

Answer 3

Field Research

Desk Research

Question 4

Explain field research

Answer 4

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

Question 5

Name 3 methods of field research

Answer 5

Observation
focus groups
surveys

Question 6

Explain Observation as a method of field research with example

Answer 6

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

Question 7

Explain Focus groups as a method of field research with example

Answer 7

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

Question 8

Explain surveys as a method of field research

Answer 8

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

Question 9

Explain the advantages of field research

Answer 9

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

Question 10

Explain the disadvantages of field research

Answer 10

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.

Question 11

Explain desk research

Answer 11

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

Question 12

Name three forms of desk research

Answer 12

internal reports
government publications
internet

Question 13

Explain Internal reports as a method of desk research

Answer 13

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

Question 14

Explain government publications as a method of desk research

Answer 14

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

Question 15

Explain Internet as a method of desk research

Answer 15

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

Question 16

Explain the advantages of desk research

Answer 16

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

Question 17

Explain the disadvantages of desk research

Answer 17

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

Question 18

What is the importance of market research for a business

Answer 18

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

Question 19

Explain market segmentation with example

Answer 19

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

Question 20

Explain Geographic segmentation with an example

Answer 20

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

Question 21

Explain demographic segmentation

Answer 21

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

Question 22

What are the advantages of market segmentation

Answer 22

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

Question 23

Explain target market with example

Answer 23

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

Question 24

Explain with example niche market

Answer 24

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

Question 25

What are the advantages of niche marketing - explain

Answer 25

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

Question 26

What is the marketing concept with example

Answer 26

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

Question 27

Explain the Benefits of satisfied customers to the business

Answer 27

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

Question 28

Explain marketing plan

Answer 28

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

Question 29

Explain the four steps of a marketing plan

Answer 29

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

Question 30

Explain the benefits of a marketing plan

Answer 30

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

Question 31

Explain marketing strategy

Answer 31

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

Question 32

What is the marketing mix

Answer 32

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

Question 33

Define a product

Answer 33

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

Question 34

Explain with example brand name

Answer 34

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

Question 35

What are 5 benefits of brand names

Answer 35

``` Higher Price Increase in Sales Brand Loyalty Increase Product Line Power ```

Question 36

Explain own brand products with example

Answer 36

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

Question 37

Explain 4 benefits of own brand products for a retailer

Answer 37

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

Question 38

What is product design

Answer 38

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

Question 39

Explain what a good product design has with examples

Answer 39

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

Question 40

Why is good product design important (benefits)

Answer 40

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

Question 41

Why is product packaging important? 5 reasons

Answer 41

``` Increases sales Protection of the product Information about the product Image Convenience ```

Question 42

Explain the stages of the product life cycle

Answer 42

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

Question 43

Explain price as part of marketing mix

Answer 43

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

Question 44

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

Answer 44

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

Question 45

Explain price skimming strategy

Answer 45

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

Question 46

Explain penetration pricing strategy

Answer 46

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.

Question 47

Explain price discrimination strategy

Answer 47

``` 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 ```

Question 48

Explain loss leader

Answer 48

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

Question 49

Explain premium pricing

Answer 49

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

Question 50

Explain break even price

Answer 50

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

Question 51

Explain break even point

Answer 51

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

Question 52

Explain two categories of business costs and explain

Answer 52

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

Question 53

Explain margin of safety

Answer 53

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

Question 54

What are the benefits of break even analysis

Answer 54

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

Question 55

What are the limitations of breakeven analysis

Answer 55

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

Question 56

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

Answer 56

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

Question 57

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

Answer 57

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"

Question 58

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

Answer 58

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

Question 59

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

Answer 59

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

Question 60

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

Answer 60

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

Question 61

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

Answer 61

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

Question 62

Explain Increase sales as an advantages of market segmentation with example

Answer 62

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

Question 63

Formula for break even point in units

Answer 63

fixed costs / (selling price - variable costs)

Question 64

Formula for break even point in euro

Answer 64

BEP in units x selling price

Question 65

Formula for margin of safety

Answer 65

forecast sales in units- BEP in units

Question 66

Explain higher price as a benefit of branding with example

Answer 66

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.

Question 67

Explain Increased sales as a benefit of branding with example

Answer 67

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

Question 68

Explain brand loyalty as a benefit of branding with example

Answer 68

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

Question 69

Explain launching new products as a benefit of branding with example

Answer 69

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

Question 70

Explain Power as a benefit of branding with example

Answer 70

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

Question 71

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

Answer 71

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

Question 72

Why is packaging important for the reason of convenience With example

Answer 72

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

Question 73

Why is packaging important for the reason of image With example

Answer 73

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

Question 74

Why is packaging important for the reason of information With example

Answer 74

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

Question 75

Why is packaging important for the reason of protection With example

Answer 75

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

Question 76

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

Answer 76

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

Question 77

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

Answer 77

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

Question 78

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

Answer 78

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

Question 79

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

Answer 79

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

Question 80

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

Answer 80

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

Question 81

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

Answer 81

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

Question 82

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

Answer 82

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

Question 83

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

Answer 83

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