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National 5 Business Management > Marketing > Flashcards

Marketing Flashcards

1
Q

Describe marketing

A

Marketing involves trying to meet the needs and wants of customers.

A business does this by finding out what the customers want and
providing this at a price which will make the business a profit.

A market exists when buyers and sellers are in contact with each other, for example, a shop, a website, car boot sale

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2
Q

Describe the role of marketing

A

Identify products/services currently in demand

Anticipate what products/services will be in demand in the future

To monitor changes and trends

Raise awareness of products/services and the business image

To encourage new customers to purchase products

Effective marketing can result in market growth, increasing market share and ultimately becoming market leader

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3
Q

Why is marketing important?

A

It can attract new customers

It can give the business an opportunity to enter new markets and grow

It can increase the amount of profit a business can make

It can lead to increased market share

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4
Q

What is market research?

A

The methods used by businesses to find out what customers need and want.

It involves gathering, recording and analysing information about a market.

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5
Q

What are the different methods of desk research?

A

Internal

External

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6
Q

Describe internal desk research

A

Examining customer records e.g. Tesco Clubcard

Analysing customer complaints

Studying past trends in sales figures

Analysing the final accounts

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7
Q

Describe external desk research

A

Competitors websites

Government statistics e.g. census

Internet

Newspapers

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8
Q

What are the advantages of desk research?

A

There is a wide variety of sources available as different information has been published by different businesses

Cost effective as it is cheaper to gather than field research

Less time consuming and easy to obtain as the information already exists

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9
Q

What are the disadvantages of desk research?

A

It is not as reliable as field research as it was gathered for another purpose

May be out of date

May contain bias

Information also available to competitors

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10
Q

Give 6 methods of field research

A

Online Surveys

EPOS

Hall Test

Focus Groups

Loyalty Cards

Social Media

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11
Q

Describe a postal survey

A

A postal survey is when a list of questions is sent to people through the post. They will be asked to complete the survey and to send it back to the business.

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12
Q

What are the advantages of postal surveys?

A

It is relatively cheap to send the survey to large numbers of people spread over a wide geographical area

People can complete the survey at their own pace at a time that suits them.

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13
Q

What are the disadvantages of postal surveys?

A

People need to open the survey sent to them in the post and send it back; they might not do this

Can take time to get the information back

There is no opportunity for the respondent to clarify anything they do not understand

The survey must be designed carefully so that it is not misinterpreted.

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14
Q

Describe observations

A

An observation involves watching something and recording what happens. The observer might have to count how many times something happens, or someone does something, or what someone’s reaction is to a situation.

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15
Q

What are the advantages of observations?

A

Facts and figures (quantitative information) are gathered, which are easier to analyse than qualitative information

People being observed might not be aware so should act naturally

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16
Q

What are the disadvantages of observations?

A

Those being observed are not usually asked for their opinion or to give an explanation as to why they did or did not do something

There are privacy and ethical issues to consider when observing people

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17
Q

Describe EPOS

A

EPOS systems gather information when consumers are making a purchase at the checkout.

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18
Q

What are the advantages of EPOS?

A

Large quantities of information can be gathered

The information gathered is factual and not just opinions

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19
Q

What are the disadvantages of EPOS?

A

It can be expensive to purchase an EPOS system – especially for a small business

No opportunity to gain the opinion of the customer

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20
Q

Describe loyalty cards

A

Customers present the card when purchasing goods and services and receive a reward in return e.g. Tesco Clubcard.

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21
Q

What are the advantages of loyalty cards?

A

Up to date information on consumer buying habits is obtained

Can encourage customer loyalty as there is an incentive to make repeat purchases

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22
Q

What are the disadvantages of loyalty cards?

A

Expensive to set up and run

Need to provide discounts or other incentives to encourage customers to keep using them.

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23
Q

What are the advantages of field research?

A

The information is up to date

The information has been gathered for a specific purpose and is therefore relevant

Not available to competitors

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24
Q

What are the disadvantages of field research?

A

Collecting the information is expensive as staff need to be trained

It is time consuming to gather

Data must be analysed once gathered

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25
Q

What are the uses of market research?

A

Identifies how much the customer is willing to pay

Target market can be identified so the most appropriate methods of promotion are used

Can gain a competitive advantage

Reduces the risk of failure

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26
Q

What are the 4 p’s

A

Product
Price
Place
Promotion

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27
Q

Why does product tend to be the most important element?

A

Must meet customers wants or they will not buy it

Determines what the PRICE will be

Determines how it is PROMOTED

Determines where it is sold - PLACE

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28
Q

What things ensure a product stands out?

A

Physical appearance e.g. size, shape, colour

Taste e.g. texture, flavour

Quality - value for money

Packaging – eye catching, environmentally friendly

Unique Selling Point (USP)

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29
Q

Give the steps to developing a product

A 
Generate the idea 
Analyse the idea 
Produce the prototype 
Test the product 
Alter the product 
Produce the product
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30
Q

Describe generating the idea

A

The first step is to come up with the idea for the product.

This can come from within the business or from market research to find out what the consumer wants.

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31
Q

Describe analysing the idea

A

At this step the business will decide whether the product can be made.

This may not be possible for a number of reasons e.g. lack of finance, lack of up to date technology, problems with design and production (internal factors).

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32
Q

Describe producing the prototype

A

The business will create an example of the product to see what it will look like, the size and the design to see if it works and is possible to produce.

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33
Q

Describe testing the product

A

Use test marketing or a focus group to ask the consumers views of the product.

Collect feedback.

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34
Q

Describe altering the product

A

Make changes based on the market research to ensure the product is the best is can be.

This will reduce the risk of failure

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35
Q

Describe producing the product

A

Start production of the product.

Advertise and promote the product so that consumers are aware that it exists.

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36
Q

Describe branding

A

Brands are products or ranges of products which have a unique, easily recognised character

It can be a word, symbol or slogan that no-one else can use

Brands are perceived to be better quality than other similar products

Customers will pay a premium price for a branded item, partly due to high packaging and advertising costs.

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37
Q

What are the benefits of branding?

A

Creates a unique identity and is instantly recognisable to customers

Helps to encourage repeat custom

New products are trusted by consumers - reduces the risk of failure

Gives an impression of quality and reliability

A premium price can be charged

The brand name can become valuable

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38
Q

What are the costs of branding?

A

Establishing a brand is expensive and time consuming. To protect the brand name legal costs will be incurred

Bad publicity for one product in the brand can negatively affect the whole brand name

Some brands are likely to be copied, fake versions can appear on the market for cheaper

Brands must invest in research and development and advertising to remain competitive

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39
Q

Describe own branding

A

When a business produces and sells their own version of a product.

Usually, the brand is the name of the retailer

Retails do not normally manufacture their own products e.g. McVities manufacture and package biscuits for M&S

40
Q

What are the advantages of own branding

A

Usually cheaper than branded products therefore popular with customers.

Gives customers more choice

Very little advertising required as own brand is well known e.g. Tesco

41
Q

What are the disadvantages of own branding

A

Sometimes seen as poorer quality compared to other brands

Can be viewed as a copy or imitation of a brand.

42
Q

Describe packaging

A

Packaging is the materials used to protect and promote goods.

Packaging is designed to capture a customer’s attention and it can directly effect whether they buy the product or not.

Packaging has to fulfil a number of important functions, including:
communicating the brand and its benefits
protecting the product from damage
preventing leakage of the contents
presenting government-required warning and information labels.

It is almost as important as the product itself as it has to represent the brand and the product!

43
Q

What are benefits of packaging?

A

Makes the brand recognisable and identifies the product from their competitors – advertises the brand

Attracts consumers and persuades them to try a product

Protects the product and can keep it fresh e.g. food

Informs consumer about the product e.g. ingredients

Can be updated to attract new customers e.g. Coca-Cola name bottles and Santa bottles

Can make the product look like it is of a higher quality

44
Q

What are the costs of packaging?

A

Can be costly for the business to make packaging if it wants to give an impression of a high quality image

Needs to be updated to stay in line with Government legislation

More pressure to reduce plastic use and easy to recycle materials to limit damage to the environment

Product packaging can be misleading which can give the business a bad reputation

Packaging can be copied easily

45
Q

What are some pricing strategies?

A

Low Price

Market Price

High Price (Premium Price)

Penetration Pricing

Price Skimming

Promotional Pricing

Psychological Pricing

Destroyer Pricing

Cost-Plus Pricing

46
Q

Describe low price

A

A business may decide to charge a price lower than those of competitors to increase sales. It is usually used in a marketplace with little brand loyalty and competition is high. Can be used to attract a different target market e.g. value ranges in supermarkets.

47
Q

Describe market price

A

The price is set at the market rate which means that a business charges a similar price to competitors. This happens in markets where there are a few large dominant companies e.g. petrol. If one petrol retailer reduces their price competitors will match it or better it almost immediately.

Instead of competing on price these businesses tend to compete using other incentives such as air miles, nectar points or free gifts.

48
Q

Describe high (premium) pricing

A

A business can charge a high or premium price for their product if they are seen as being better than their rivals in meeting the needs of the target market e.g. perfumes and designer clothes.

Other reasons for charging a high price would be a well-established brand name and reputation, lack of competition in the market or a USP (Unique Selling Point).

In the short term a high price can be charged for innovative products when they are first introduced to the market.

49
Q

Describe penetration pricing

A

This is used by a business that is entering a market where competitors are already selling similar products. Prices will be set lower than competitors to tempt customers to choose to buy the new product rather than the competitors. Once the popularity of the product increases the price will increase in line with competitors’ prices.

50
Q

Describe price skimming

A

A business will use this strategy when they are the first to launch a new product onto the market. The price is high which allows the business to make a large initial profit and recoup some of the costs of developing the new product. As competitors enter the market the price will gradually fall.

51
Q

Describe promotional pricing

A

This is used to boost sales in the short term by lowering the price of the product. It can also be employed to create interest in a new product e.g. BOGOF, 20% off flash sale.

Supermarkets use promotional pricing for some of their products. They will advertise the low price for these products attracting customers into the store in the hope that they will buy a whole range of other goods at the same time.

52
Q

Describe phycological pricing

A

A business will set prices to make the customer believe that the product is cheaper than it is, for example 99p instead of £1.00 or £99.99 instead of £100.00.

53
Q

Describe destroyer pricing

A

This is used by a business who wants to eliminate the competition from the market. Prices are lowered to force competition to lower their prices – hopefully forcing them out of the market. When that happens, prices are increased to their original level.

This strategy is used by large organisations who can afford to make a loss in the short term until the competition has been destroyed.

54
Q

Describe cost-plus pricing

A

A common way to make pricing decisions is to calculate how much it costs to make a product or complete a particular job and then add on a percentage for profit. This is known as the MARK UP.

55
Q

What factors should you consider when choosing a place?

A

Staffing

Competition

Location of Customers

Parking Facilities

Infrastructure

Finance Available

56
Q

Describe location of customers

A

Businesses want a location where a customer base already exists e.g. a busy shopping mall

Customer will not travel too far – market research will help identify where the customers are

57
Q

Describe availability of premises

A

Certain size of shop may be required

Certain facilities may be needed e.g. large stockroom, kitchen area

58
Q

Describe infrastructure

A

Transportation links are required so customer, employees and suppliers can get to the business

59
Q

Describe environmental impact

A

Businesses need to think about the environmental impact – they do not want to be ripping down forests in order to build premises

60
Q

Describe availability of employees

A

A certain number of staff might be needed – an area with high unemployment levels would benefit a business

Employees with suitable skills may be required e.g. tradesmen

61
Q

Where can products be sold?

A 
E-commerce
High Street Shop
Shopping Centre
Catalogues
Teleshopping
Market
62
Q

Give 3 methods of advertising

A

Cinema
TV
Billboards

63
Q

Describe celebrity endorsement

A

Celebrity endorsementadvertising is defined as a well-known person using his or her fame to help promote a product or service

64
Q

What are the advantages of celebrity endorsement?

A

Consumers buy the product in an attempt to be the same as the celebrity

Assumed the products will be of a high quality as celebrities are using them

Exclusive image - higher prices can be charged

Brand loyalty can be created

65
Q

What are the disadvantages of celebrity endorsement?

A

It can cost large amounts of money to get and retain the celebrity

If the celebrity gains bad publicity the product also tarnished

66
Q

Describe billboards

A

Billboard advertising is the process of using a large-scale print advertisement to promote a product/service

67
Q

What are the advantages of billboards?

A

Usually in busy locations

Can be cheaper than other forms of advertising

Potential customers will see the advert repeatedly over a long period

68
Q

What are the disadvantages of billboards?

A

May be ignored by passers-by

Can only include limited information

No demonstration can be made

69
Q

Describe technology in marketing

A

Technology plays a major role in marketing. This is used in market research, promotions, and sales through online surveys, EPOS, social media adverts, and e-commerce

70
Q

Give 6 uses of technology in marketing

A 
Social Media
Apps
Text Alerts
E-mail 
e-commerce 
Online Surveys
71
Q

Describe databases and technology in marketing

A

Databases are used by the marketing department to store highly detailed information on customers purchases. Databases allow departments to easily access these records so they can target particular groups of society and see which products are commonly bought together.

72
Q

Describe e-commerce/s-commerce and technology in marketing

A

This is the buying and selling of goods online.

The marketing department can use e-commerce to reach the global market who will be able to shop 24-hours-a-day 7-days-a-week.

73
Q

What are the advantages of e-commerce for businesses?

A

Can sell worldwide means the business will be better known

Increased sales, leading to increased profit

Savings on expensive showrooms/stores

Business is open 24/7

Can sell a larger variety of stock

74
Q

What are the disadvantages of e-commerce for businesses?

A

Business is in competition with lots of others

Designing and keeping the website up-to-date is expensive and requires specialists

Not all the businesses target customers have access to the internet.

If the website crashes, then customers won’t be able to buy any goods.

75
Q

What are the advantages of e-commerce for customers?

A

Customers have a wider range of goods to choose from

They can ‘shop around’ and get the best deal

Internet prices are often lower than in shops

Customers can shop from the comfort of their own home ‘24/7’

Arrange when you want your items delivered and where

76
Q

What are the disadvantages of e-commerce for customers?

A

Customers need to own or have access to a computer and be on-line and know how to use the Internet.

Delivery problems

Inconvenience of returning unwanted goods.

Time it takes for refund to be put back into your account

Difficulty in communicating with business

Security risks of buying on-line

77
Q

Describe cinema advertising

A

Cinema advertising is a form of advertising used in cinema to promote products or services. The presence of the advertisement takes place before the movie for around 20-30 minutes.

78
Q

Give disadvantages of cinema

A

The message is short lived

Limited audience

Expensive to produce good quality adverts

79
Q

Give advantages of television

A

Exposure to a national audience targeting all market segments/ socio economic groups

Product can be demonstrated

Regular adverts can be very persuasive

80
Q

Describe television advertising

A

A television advertisement is a span of television programming produced and paid for by an organization. It conveys a message promoting, and aiming to market, a product or service.

81
Q

Describe advertising

A

Producing paid material to inform public of a product or service.

82
Q

Describe sales promotions

A

A short-term marketing strategy which aims to increase sales of a particular product or a range of products.

83
Q

Describe loyalty card promotions

A

The more that a customer spends in a shop, the more points are added to their loyalty card. These points can then be converted into some sort of reward, for example a discount on other products.

84
Q

Describe free samples

A

Many food companies will offer free samples as a way to let potential customers test a product

85
Q

Describe free gifts

A

Often a business will encourage customers to buy by offering a free gift with its product.

86
Q

Describe point of sales displays

A

Point of sale displays are to be found at the checkout. The point of sale display is most commonly designed to attract the customer to products that are new

87
Q

Describe BOGOF

A

A commonly used special offer. This deal is used to offer customers extra value and may encourage them to buy more or to choose one business or product over another.

88
Q

Describe special offers

A

Special offers are short-term pricing strategies that businesses, especially shops, will adopt to encourage customers to buy from them.

89
Q

Describe discounts

A

By offering products at a reduced price for a set period of time, a business can offer customers better value

90
Q

Describe email in ICT

A

Customers can agree to be added to a mailing list and they will be e-mailed with special offers, details of new products and other promotional materials.

91
Q

Describe QR Codes in ICT

A

When a customer scans a QR code it will take them directly to a company website. They are often shown on promotional advertising billboards and magazines. It enables the customer to access the goods quickly and easily. This could increase sales.

92
Q

Describe online surveys in ICT

A

Market research conducted over the internet in the form of a questionnaire e.g. SurveyMonkey and e-mail. (Refer back to methods of field research).

93
Q

Describe social media in ICT

A

Using platforms such as Twitter/Instagram/Facebook/ Snapchat which allows quick interactions with customers. Customers follow businesses they like to see products on sale and can see updates on stock levels. Sharing/ “like”ing of information increases the exposure of the business and celebrities can tag businesses in posts. Easy to run competitions which boosts publicity.

94
Q

Describe apps in ICT

A

With the growth in mobile technology many businesses have launched Apps to give customers easier access to products and services when they are on the move

95
Q

Describe databases in ICT

A

These are used to keep customer records and can be easily searched to allow the business to target marketing materials to particular groups of customers e.g. student discount

96
Q

Describe data publishing in ICT

A

This software package can be used to design eye catching marketing materials to persuade customers to buy products/services

National 5 Business Management (6 decks)

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