Marketing Flashcards
Desk Research - Description
Involves researching & analysing info that has been gathered
- News articles
- Sales figures
- Competitor’s website
Desk Research - Advantages
Timely - Desk info is quick to gather
Available - Already exists, easy to look up
Desk Research - Disadvantages
Not Appropriate - Desk info not fit for exact purpose may have to be changed to fit a businesses needs
Not Concise - Researcher may have to read lots of info to get what’s needed
Field Research - Description
Gathering new info suitable for business’s exact needs
Field Research - Advantages
Timely - Info is up to date
Complete - No parts missing
Accurate - Info should be correct as it can be validated
Field Research - Disadvantages
Not Cost Effective - Requires trained & paid interviews or expensive companies
Stages of Product Life Cycle
Product development - Product being researched & develops changes made after feedback
Introduction - Product is launched, promo activities for hype
Growth - Product been on market for a while, customers aware of it & purchasing it
Maturity - Competition starts to enter market
Saturation - Product suffers from too many competitors
Decline - Product stops being produced
Product Portfolio - Description
A range of products on sale
Product Portfolio - Advantages
Can spread risk over different markets
A range of products increases awareness of the brand as a whole
Newer products can replace those at the end of their life cycle
Businesses will find it easier to launch new products with a large existing portfolio
Product Portfolio - Disadvantages
High costs involved in researching & developing products
High marketing costs incurred to promote so many products
Bad publicity surrounding a product can affect the whole portfolio
Dogs can drain a business of profits unless divested
Pricing Strategies - Competitive
Price of product similar to competitiors
- Avoids price war
- Encourages competition, improves market
- Other elements of marketing mix must be better than competitions to ensure sales
Pricing Strategies - Skimming
Price set high to begin with & lowers over time
- Hype around product enables higher prices to be charged, increases profits
- Lack of competition allows maximum prices to be charged
- High prices puts people off
- Results in low initial sales
Pricing Strategies - Penetration
Price set low to begin with & increases over time
- Encourages customers to try new products
- Business hopes to gain repeat custom once price rises
- Little profit generated during initial low price period
- Could result in price war if competitors set lower prices
Pricing Strategies - Destroyer
Price set extremely low for a period of time to force out competitors
Competitors are forced out of the market, then prices can increase again
Increases market share
Can only be used by larger
companies that can afford to make losses
Illegal & could breach CMA’s anti-competition rules
Pricing Strategies- Cost Plus
Business calculates unit cost & then adds percentage mark-up for profit
Quick way of setting selling price
Ensures total costs are covered & profit is generated
Indirect costs not covered
External factors not taken into account
Pricing Strategies - Price Discrimination
Price altered depending on discriminating factor
Ensures products appeal to different market segments
High profit margins on some price brackets
Harder to budget for sales revenue in advance
Loss in potential revenue from selling at cheaper price
Pricing Strategies - Loss Leaders
Promo price of 1 or more products set unprofitably low so customers buy other products
Brings customers to business
Encourages repeat purchases
Risk that some customers will only buy loss leaders, impacts profits
Pricing Strategies - Psychological
Price set just below next rounded number
Makes customer think product is cheaper than it is
Product fits price band customer has in mind
Calculating total owed can be more difficult
Customers may ignore attempt so rest of marketing mix must convince them to purchase
Press Conferences
Media invited to business presentation where they’re given info or news
Press Conferences - Advantages
Business can send message to wide audience whilst keeping control of what’s reported
Helps get the media ‘on side’, allows press the opportunity to ask questions directly
Press Conferences- Disadvantages
Could face difficult questions & be put on the spot
Business could make situation worse if under-prepared
Press Releases
Media provided with written account of business’s newsworthy events
Press Releases - Advantages
Can counteract bad publicity
Business can send messages without further questions
Press Releases - Disadvantages
Takes time to ensure wording is correct
Donations
Some donate anonymously, others make it a PR event
Donations - Advantages
Promotes the CSR aims of business & can make it seem ethical
Can help business achieve a positive image
Donations - Disadvantages
Some shareholders may prefer money being invested in growing the business
Sponsorship
Pay to support an event
Sponsorship - Advantages
Can benefit from success of those they sponsor
Can help businesses become popular with customers who support the event
Sponsorship - Disadvantages
Expensive
If event suffers bad PR then business will be associated with it
Company Visits
Opens factories to public
Company Visits - Advantages
Customers can get a sense of what the business is like
Company Visits - Disadvantages
Staff will have to show visitors around which can affect their productivity
Promo Merch
Giving out free gifts with business details on them
Promo Merch - Advantages
Customers reminded of company when they use the item
Customers feel rewarded
Promo Merch - Disadvantages
Expensive
Cheap-looking gifts can affect business’s image
Research & Development
Sales - No sales yet as product is still being developed
Profits - Making a loss due to development costs
Introduction
Sales - Slow as customers unsure of product
Profits - High promo costs result in a loss
Growth
Sales - Rising rapidly due to lack of competition
Profits - Starting to be made
Maturity
Sales - Peak & levels out
Profits - Starting to fall
Saturation
Sales - Beginning to fall as customers flocking to competition
Profits - Falling rapidly
Decline
Sales - Product withdrawn from market
Profits - Continuing to fall
People
Refers to who is representing a business
Train staff to deal with customers effectively
- Staff informed of business expectations
Regularly update staff on product developments
- Staff appear knowledgeable
Ensure selection methods are rigorous
- Employees suitable to represent business
Monitor staff
- Ensures staff representing business appropriately
Process
Refers to how a customer receives a service
Ensure outlets & call centres are well staffed
- Avoids long queues
Offer live chat services on website
- Reduces number of queries made over the phone
Empower customer-facing staff to make decisions
- Avoids waiting as queries not passed onto management
Introduce latest tech
- Faster than humans & will speed up processes
Physical Evidence
Refers to what customers see
Modern & clean vehicles & premises
- Customer’s opinion not ruined by dirty shops or vans
Settings should convey ambiance to match service on offer
- Customers feel needs are recognised even before making a purchase
Feedback from customers should be promoted
- Provides reference materials for new customers
Layout of website should be carefully considered
- Should convey the type of business it is
Direct Selling
Selling directly from manufacturer to consumer
E-Commerce
Business selling products using the internet
Entire range can be shown online
Customers reached 24/7
Online discounts offered
Expensive to design high-quality websites
Customers need internet access
May have to pay delivery costs
Mail Order
Business selling its products using a catalogue
Credit facilities offered to customers
Companies save on staffing & store costs
Glossy catalogues can be expensive to produce
Bad debt may be incurred
Direct Mail
Business posts letters & letters directly to customer
Specific market segments targeted
Wide geographical area targeted by placing leaflets inside newspapers
Customers may perceive this as junk & may throw this away
Customer mailing lists can quickly become out of date
Personal Selling
Salesperson sells products directly to customers
Allows demonstration or explanation of product to be given
Feedback on products gathered from customers
Customers may not listen to this type of selling
Staffing costs & commission make this expensive
Shopping Channels
Business selling products on the TV
Customers see product being modelled
Customers encouraged to buy on impulse
Customers need to switch onto the channel
Long waiting times & have to pay delivery costs
Market Led
Business develops products off of customer wants
Market research carried out to determine customer wants
Exist in competitive markets
Marketing mix responsive to changes in external factors
Product Led
Produces products they believe customers want
High levels of product development
New tech often product led
Product unresponsive to changing external factors
Need/Want
Businesses need to understand different motivations customers have & offer products accordingly
Types of Purchases
Routine/habitual
Impulse
Informed
Marketing has to raise awareness of products & promotion methods can influence routine purchase
Field Research - Quota Sampling
Researcher chooses from group of people with certain characteristics
A - Easy as group lists are pre-made
- Can select customers that reflect target market
D - Sample from each group not randomised, researcher could use bias
Field Research - Online Survey
Website or email used to ask customer questions
A - Customers surveyed over large geo area
- Online software used to easily analyse results
D - Clarification not gained
- Access to internet must be available
E-Commerce
Selling products online
A - Customers reached 24/7
- Entire range shown online
- Online discounts offered to attract customers
D - Takes time & money to set up website
- Customers need internet access
- Customers wary of providing details online
Direct Mail
Business posting letters & leaflets to customers directly
A - Specific market segments targeted
- Wide geographical area targeted
D - Customers may perceive as “junk mail” & throw it away
- Mailing lists can become out of date, wastes money
Personal Selling
Salesperson selling directly to customer
A - Allows demonstration of product
- Feedback gathered from customers
D - Can be seen as a hassle
- Staff costs makes this expensive
Wholesalers - Manufacturers
A - Packaging of goods carried out by wholesaler which saves manufacturer time
- Wholesalers buy in bulk, saves manufacturer making small deliveries
D - Less profit as cut is taken by wholesalers
- Manufacturer loses control of how product is marketed
Wholesalers - Retailers
A - Can benefit from promotions offered by wholesalers
- Can trial smaller orders of new products, not left with unsold inventory
D - More expensive than going directly to manufacturers as wholesalers add margin of profit
- Retailers miss deals by not going to manufacturers directly
Online Retailers
A - Products sold worldwide
- Can be sold 24/7
D - Can’t try product before trying
- Delivery charges off putting
Discount Stores
A - Products sold for cheap
D - Limited product range
- Some don’t like image of stores
Department Stores
A - Many target markets catered for
- Central locations attract customers
D - More closing due to high rent
- Staff supervision difficult
Trade Credit
Manufacturers offer retailers credit to pay for goods later
A - No cash required to stock products
- Can purchase goods & pay once sold
D - Could lead to debt if unable to sell goods
POS Materials
Free posters given to retailers to display products
A - Enhances look of store
- Can draw customers’ to product display
D - Retailers need to dispose of bulky materials at end of promotion
Sale of Return
Manufacturers give retailers option to return items that don’t sell
A - Retailers can try new products without risk of unsold inventory
- Improves cashflow
D - Products may be returned in poor condition, creates waste
Dealer Loaders
Discounts used to encourage retailers to stock up on products
A - Retailers can save on unit cost of products
- Savings passed to customers, increases sales revenue
D - Retailers may overstock
- Products may go out of fashion
Staff Training
Manufacturers offer retailers free training to give them skills of how to sell product
A - Staff become experts on product
- Staff motivation improved
D - Training done in normal hours, reducing productivity
BOGOF
A - Encourages customers to try new products
D - Customers feel pressured into buying more than they need
Free Gifts
Tempts customers to buy products again
A - Requires multiple tokens, multiple purchases
D - Difficult to find gifts that appeals to all markets
Vouchers
A - Customers getting better value for money, attracting new customers
- Encourages repeat customers
D - Discounts can reduce profits
- Some customers only spend value of voucher, limits sales
Interest-Free Credit
Customers offered credit to pay for goods later
A - Customers can purchase products & pay when they can afford it
D - Can lead to debt if many customers unable to pay by agreed date
EPOS
Used to gain market research information
Social Media
Used to interact with customers
A - Free to use
- Comments left can help improve product
D - Negative feedback can put customers off using business
E-mails
Can offer promotions to customers
