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Business Theme 1 > Marketing > Flashcards

Marketing Flashcards

1
Q

What is a dynamic market?

A

Markets that are subject to rapid/ continuous change

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2
Q

What is market size?

A

The total value/ volume of sales in the market

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3
Q

What is market share?

A

The proportion of total sales in a particular market for which one or more firms are responsible, expressed as a percentage

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4
Q

Formula for market size

A

Total unit sales in a market x avg price

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5
Q

Formula for market share

A

Sales of a business/ total sales in the market X 100

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6
Q

Formula for market growth

A

Change in the size of the market/ original size of the market X 100

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7
Q

Two benefits of online retailers (consumer and to retailers)

A

Consumer: Cheaper products
Retailers: Increased customer base

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8
Q

Benefits of strong branding

A

Firms can differentiate from rivals, create customer loyalty, help product recognition and charge higher prices

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9
Q

3 ways competition affects the market

A

More pressure on pricing, more innovation as firms seek a competitive advantage, more consumer choice

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10
Q

3 Ways businesses adapt to change

A

Invest in new tech, products or processes etc
Adapt marketing mix
Market research to keep in touch with trends

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11
Q

What is meant by product orientation?

A

Approach to business which places the emphasis on the production process & the product itself

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12
Q

What is meant by market orientation?

A

Approach to business which places needs of consumers at the centre of the decision making process

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13
Q

What is primary research?

A

The collection of first-hand data, which did not exist before for a specific purpose so is original data

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14
Q

What is secondary research?

A

Research that has already been undertaken by another organisation for a different purpose so already exists

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15
Q

What is quantitative data?

A

Statistical data that informs a company about people’s behaviour but does not identify the reasons

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16
Q

What is qualitative data?

A

Non-statistical information that gives a company in depth insight into the reasons for human behaviour

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17
Q

Two benefits of primary research

A
  1. More specific to the needs of the business & its research objectives.
  2. More detailed insights into behaviour, attitudes & wants of target customers
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18
Q

Two drawbacks of primary research

A
  1. Expensive & time-consuming

2. Risk of survey bias

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19
Q

Two benefits of secondary market research

A
  1. Often free & easy to access

2. Good source of market insights as data collected by experts

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20
Q

Two drawbacks of secondary market research

A
  1. Can quickly become out-of-date

2. Not tailored to specific research objectives

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21
Q

What is meant by sample size?

A

The size/ proportion of the whole population chosen as representatives of the market for market research purposes

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22
Q

3 ways ICT could be used to support market research

A
  1. Company websites
  2. Social networking and use of social media
  3. Databases
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23
Q

3 ways of segmenting a market

A

Demographic

Geographic

Behavioural

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24
Q

What is market mapping?

A

The process of positioning competition within a market by plotting the key variables that differentiate products within the market against each other

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25
Q

How can a business gain a competitive advantage?

A

price, adding value, innovation, reliability, quality, reputation, branding and promotion, customer service and convenience.

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26
Q

How can a business differentiate its products?

A

Flexible pricing,
wider product ranges,
better value, better quality etc.

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27
Q

How can a business add value? (6)

A

providing additional features such as
bundling, after-sales services, quicker response time to orders, loyalty offers, customization, investing in branding to strengthen reputation and image

28
Q

Factors leading to a change in demand

A

Changes in tastes & preferences
Changes in income
Population changes

29
Q

Factors leading to a change in supply

A

Cost of production
External shocks
Govt action: taxation and subsidies

30
Q

PED

A

A measure of the responsiveness of demand to a change in price i.e. what will happen to the demand for the product if its price changes

31
Q

YED

A

A measure of the responsiveness of demand to changes in income i.e. what will happen to the demand for a product if consumers’ incomes change

32
Q

PED FORMULA

A

Percentage change in quantity demanded/ Percentage change in price

33
Q

YED FORMULA

A

Percentage change in quantity demanded/ Percentage change in income

34
Q

Identify three factors which influence:

PRICE ELASTICITY OF DEMAND (PED)

A

Availability of substitutes
Time- how much time has elapsed since the time the price changed
Frequency of purchase
If good is luxury/ necessity

35
Q

Identify three factors which influence:

INCOME ELASTICITY OF DEMAND (YED)

A

Price of product relative to incomes (this is PED)
If good is inferior/ normal/ luxury
Economic climate& impact on incomes e.g. recession
that rate at which the desire for the good is satisfied as consumption increases

36
Q

Explain the significance of price elasticity of demand to businesses in terms of implications for pricing

A

If the PED is elastic, any increase in price should lead to a decrease in revenue and a decrease in price should lead to higher revenues.

PED is inelastic, an increase in price should increase revenues, whereas a reduction in price should reduce total revenue.

37
Q

Explain the significance of income of elasticity of demand to businesses:

A

Important to know the YED of products to determine revenue growth in specific stages of the economic cycle, e.g. products with negative YED will do well in a recession when incomes are generally lower; this may influence businesses to diversify product portfolios to maximize sales in different markets

38
Q

Elements of the design mix

A

Function
Cost
Aesthetics

39
Q

3 Ways in which the design mix may change to reflect social trends:

A

Re-use and recycling of inputs

Designing for waste minimisation

Ethical sourcing

40
Q

ETHICAL SOURCING

A

Morality in decision making, inferring doing what is ‘right’, when dealing with and choosing suppliers; using materials, components and services from suppliers that act ethically in the way they respect the environment, treat their workforce well and trade with integrity

41
Q

BRANDING

A

A promotional method that involves the creation of an identity for the business that distinguishes the firm and its products from other firms

42
Q

PROMOTION

A

An attempt to obtain and retain customers by drawing their attention to a firm or its products

43
Q

3 Types of promotion

A 
Types of promotion:
      1
Advertising
          2
Public relations
          3
Sales promotion
44
Q

3 types of branding

A 
Types of branding:
      1
Corporate branding
          2
Product branding
          3
Own-label branding
45
Q

3 benefits of strong branding

A 
Benefits of strong branding:
      1
Added value
          2
Ability to charge premium prices
          3
Reduced price elasticity of demand
46
Q

3 ways to build a brand

A 
Ways to build a brand:
      1
Unique selling points (USP)/differentiation
          2
Sponsorship
          3
Use of social media
47
Q

What’s the difference between:

PRICE SKIMMING AND PENETRATION PRICING

A

Price skimming is setting a high initial price for a new product in order to recoup high research and development costs, whereas penetration pricing is setting a low initial price for a new product in order to get a foothold in the market and gain market share

48
Q

COST-PLUS PRICING

A

Adding a percentage (the mark-up) to the costs of producing a product to get a price

49
Q

PREDATORY PRICING

A

Setting a low-price forcing rivals out of business

50
Q

COMPETITIVE PRICING

A

Setting prices based on the prices charged by rivals

51
Q

PSYCHOLOGICAL PRICING

A

Setting prices to a make the consumer think that a product is cheaper than it actually is hence enticing the customer into making a purchase

52
Q

Describe two factors that affect the pricing strategy for a business:

A

1
PED value: prices set will be determined by the PED value of the products so that revenues are maximised
2
Stage in the product life cycle: depending on what stage the product is will determine what strategy is used, e.g. using discounts in the maturity stage

53
Q

3 Types of distribution channel:

A

Online
Retail
Wholesale

54
Q

3 Influences on the choice of distribution channel:

A

1
Nature of the product

2
Cost
3
Size of the market

55
Q

What has LM LMG in boston matrix

56
Q

What has LMS HMG in Boston Matrix?

A

Problem child ?

57
Q

High ms high mg?

58
Q

High market share low market growth

59
Q

PRODUCT LIFE CYCLE EXTENSION STRATEGIES definition

A

Methods used to prolong the life of a product.

60
Q

Marketing strategy in a mass market

A

Mass markets tend to be more competitive, therefore there will many products available that are similar and therefore differentiation is critical, pricing is also similar with price leadership very common, promotion is significant with large investment in mass media advertising and distribution is more widespread/multi-channel in order to access the wider audience.

61
Q

Marketing strategy in a niche market

A

less competitive as needs are specific and the target audience is smaller. Products tend to be more differentiated, pricing can be more premium as customers are more willing to buy to satisfy needs and wants, promotion is more targeted via more selective media channels and tactics, and distribution is more focused based on the buying habits of the target market.

62
Q

How businesses can develop customer loyalty:

A

Focusing on developing the following:

  • customer service,
  • effective communication, - incentives,
  • customization/personalization.
63
Q

Ways in which the elements of the design mix may change to reflect social trends:

A

Re-use and recycling
Ethical sourcing
Waste minimisation

64
Q

3 Ways in which branding and promotion may change to reflect social trends:

A

Viral marketing
Emotional branding
Social media

65
Q

3 Ways in which pricing may change to reflect social trends:

A

Online sales
Dynamic pricing
Price comparison sites

66
Q

3 Ways in which distribution may change to reflect social trends:

A

Online retailing/distribution
Changing from a product to service
Collection services

Business Theme 1 (4 decks)

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