Marketing Flashcards
7ps
Price
Product
Promotion
Place
People
Physical evidence
Process
Types of market
Consumer
Industrial
Consumer market
Where individuals buy goods and services for their own personal use.
Industrial market
Where organisations purchase products to produce and provide other products.
Product led businesses
Where a business focuses on manufacturing the best product, rather than what the consumer wants.
Market lead businesses
Businesses which look at consumer needs and base their product off these needs.
Features of product lead businesses
Based of a product concept
In a market with low competition
No market research
Unresponsive to external factors
Features of market lead
Based off of consumer needs
In a market with high competition
Extensive market research
Responsive to external factors and consumer behaviour.
Undifferentiated marketing /mass marketing
Where a business sells their product to everyone.
Differentiated marketing /target marketing
Where businesses sell products to a specific group of the population.
Market segmentation
Where the business splits the population up based on different types of consumer within the population.
Types of market segmentation
Geographic
Demographic
Behavioural
Psychographic
Geographic market segmentation
Customer location
Region
ACORN classification
Whether it is rural or urban
Demographic market segmentation
Age
gender
Occupation
Behavioural market segmentation
Rate of usage
Loyalty status
Readiness to purchase
Psychographic
Personality
Lifestyles
Attitudes
Niche marketing
Identifying a gap in the market.
Consumer behaviour
The study of how individuals act when purchasing products, why customers purchase one product and not another.
Types of consumer behaviour
Habitual/ routine
Informed
Impulsive
Habitual /routine behaviour
Low customer involvement
Made automatically
Purchased often
Informed behaviour
Buyer takes time to investigate product
Alternatives are considered
Done when purchasing long lasting expensive items, therefore done infrequently
Impulsive behaviour
The customer purchases without planning
Influenced by point of sale
Advantages of market research
Business can gather feedback on how to improve products
Reduced risk on spending large amounts on unsuccessful products
Can gather information on consumer needs
Create a link between business and customers, enhancing business reputation.
Types of market research
Field and desk
Desk research
Where a business gathers secondary information from existing sources.
Field research
Where a business gathers primary information for a specific purpose by collecting their own data.
Methods of field research
Telephone survey
Postal survey
Online survey
Personal interview
Hall tests
Focus groups
Hall tests
Where a product is given to consumers so they can provide feedback
Focus groups
Where a group of customers is brought together to answer and discuss questions put forward by a market researcher, about the product.
Methods of desk research
Website
Government statistics
Newspapers
Books/ textbooks
Field research advantages
The information is complete
The information is up to date
The information is gathered for the business specific purpose
Not available to competitors
Field disadvantages
Not necessarily reliable due to consumers not being truthful
More time consuming than desk
More expensive than desk since it needs trained professionals
Desk advantages
Gather information quickly
Gather info cheaply -Doesn’t need trained professionals
The information is easy to look up and readily available.
Desk disadvantages
The information can be used by competitors
Not gathered for specific purpose
Information could be unreliable.
Could be out of date.
Sampling types
Random
Quota
Random sampling
Where the business doesn’t target any specific market segment and these people are used for their sampling no matter what.
Quota sampling
Where a business targets a specific market segment, by finding individuals within selected market, and carrying out their sampling on them until they have reached a specific target.
Product lifecycle
Product development
Introduction
Growth
Maturity
Saturation
Decline
Product development
Where the product is being designed and manufactured, these is no sales and a loss of profit
Introduction
The product is released to the public, it has no profit and low sales.
Growth product lifecycle
Where there is medium sales and medium profit due to an increase in brand recognition.
Maturity
Where there is maximised sales and maximised profit
Saturation
Where the business product begins to become less popular, and so profit and sales start to slowly decrease.
Decline
Where sales and profit rapidly decrease due to a product going out of fashion.
Extension strategies
Changing the price of the product
Changing the place of the product
Changing the method of promotion
Rebranding and repackaging the product.
Branding
Where a business or product is given a unique feature to make it more memorable and stand out from competition.
Advantages of branding
Seen as higher quality
Makes the product distinguishable from competitors
Makes products more memorable and increases brand loyalty.
Disadvantages of branding
Tarnish whole reputation with one product
Expensive to maintain brand image
Product portfolio
The range of different products a business sells
Types of product portfolio
Diversified product portfolio
Product line portfolio
Product line portfolio
Where a business has a variety of similar products on sale
Diversified product portfolio
Where the business sells a range of products over different markets.
Advantages of selling a range of products /diversified product portfolio
Increased brand awareness
Easier to launch new products
Spread risk across markets
Increased profits
Cope with seasonal fluctuation
Disadvantages of diversified product portfolio
High advertising costs
Increased R + D
whole product portfolio can be tarnished by one single failed product.
Boston matrix
A method of analysing products within a product portfolio.
Types of products in Boston matrix
Cash cows
Stars
Dogs
Question marks
Cash cows
Low market growth
High market share
Maturity stage of PL
Stars
High market growth
High market share
Growth stage of PL
Question marks
Low market share
high market growth
Introduction stage of PL
Dogs
Low market growth
Low market share
Decline stage of PL
Factors affecting price
Target market
Demand
Objectives of business
External factors
Cost of production
Pricing strategies
Cost plus
Price skimming
Penetration
Price discrimination
Destroyer
Loss leader
Promotional
Psychological
Cost plus
Where a business adds a markup to a manufacturing price, so the business knows exactly how much gross profit they make
Price skimming
Where a business starts off with a premium price and over time drops the price over time.
Penetration pricing
Where a business starts their product at a low price and increases it once it has a loyal customer base.
Price discrimination
Where a business charges different prices based on different consumers who purchase the product.
Destroyer pricing
Where the business sets their price unprofitably low, in order to decrease competition within a market.
Loss leader
Where a business sets their price low on one product in order to attract customers and make a profit on other products.
Promotional pricing
Where a business uses sales promotional strategies such as a discount sale to pressure consumers into purchasing the product
Psychological pricing
Where a business sets their price to just below a round number to trick customers into believing the product costs less than it actually does.
Channels of distribution
Manufacturer to wholesaler to retailer to customer
Manufacturer to wholesaler to customer
Manufacturer to retailer to customer
Manufacturer to customer
Wholesalers
A business which buys in large bulk from manufacturer and breaks the product down into smaller quantities by selling them onto retailers and customers.
Retailers
A business which sells products to the public in small quantities for personal use.
Advantages of wholesalers
Saves the manufacturer from making lots of smaller deliveries , decreasing delivery costs
Manufacturer can distribute large quantities of stock, meaning it doesn’t have to store this stock.
Wholesalers disadvantages
Less profit for manufacturer due to high economies of scales and not selling directly to a consumer.
Manufacturer loses control over the product after selling it.
Retailers advantages
Located close to customers
May promote the product and make a product more attractive to purchase
Large retailers can buy in bulk shifting stock
May employ sales assistants in order to shift stock, and buy more stock from manufacturer
Dsv retailers
Retailers may take a cut of the profit the manufacturer makes
Retailers can alter the price to make a larger profit, meaning that less units sell
Products will face competition from other products stocked by a retailer.
Lose control of a product after it is sold to a retailer.
Direct selling definition
Where a business sells from the manufacturer straight to the consumer.
Methods of direct selling
Personal- sales members sell to a customer going door to door
Direct mail- posting letters and leaflets to potential customers to purchase a product
Mail order - selling through a catalogue
Tv shopping channels
Telephone selling
E-commerce
Factors affecting channels of distribution
Finance
Desired image of product
Shelf life
Legal restrictions
Stage of the product lifecycle
Personal sales advantage
The sales assistant can demonstrate how to use the product.
Personal sales disadvantage
The sales assistant will have to be paid wages, increasing the cost of wages.
Direct mail advantage
Can cheaply print off leaflets to customers
The business can target specific market segments
Can target large geographic areas.
Direct mail disadvantage
Leaflets could be considered junk mail and thrown away, making them a waste
E commerce advantages
No need for retail property cutting costs
Customers can be reached 24/7
Can deliver product directly to the customer
Disadvantages of e commerce
Expensive to set up a professional website
Time consuming to set up a professional website
Customers are more likely to send products back if disappointed or the wrong size
Mail order advantages
Credit facilities are often provided
Customers can browse for products at home
Mail order companies dont have to staff shops
Mail order dsv
May be tossed away as junk mail.
Into the pipeline promotion
Where manufacturer businesses encourage retailers to purchase their product.
Into the pipeline promotion techniques
Point of sale materials
Dealer loader
Dealer competition
Staff training
Extended credit
Sale or return
Point of sale materials
Where the manufacturer business gives the retailer extra resources such as a poster to sell the product.
Dealer loader
Where a special offer is given to the retailer by the manufacturer to entice them to purchase their product (9 for price of 10)
Dealer competitions
Where a manufacturer promises a prize to their most successful retailer.
Staff training
Where a manufacturer gives them training about the product to make them more knowledgable about the product.
Extended credit (into pipeline )
Where a business manufacturer lets a retailer buy now and pay later.
Sale or return
Where a manufacturer allows any unsellable stock to be refunded by the business.
Out of the pipeline promotion
Promotion from the retailer encouraging customers to purchase a product from them
Out of the pipeline promotion
Special offers
Free samples
Credit facilities
Vouchers and discount coupons
Loyalty schemes
Competitions
Special offers
Where a retailer uses a short term pricing strategy to drop the price of the product to increase sales.
Free samples / free trials
Where a retailer allows the business to try the product before they purchase
Credit facilities (out of pipeline)
Where a retailer allows a customer to buy the product now and pay later.
Vouchers and discount coupons
Slips of paper which Allows customers to get money off purchases in the future
Loyalty schemes
Where a business gives customers points for making purchases, which they can then spend their points for discounts and free products
Public relations
A business department which aims to create a positive image of the organisation to the public and build brand awareness.
PR activities
Press conference
Press release
Donations
Sponsorship
Product endorsement
Press release
Where a business uses media to convey a written message to customers and the press about upcoming business events
Press conference
Where members of the press are invited to watch a presentation which is given by the business in order to impart information about the business
Sponsorship
Where a business pays to have their brand associated with another business.
Product endorsement
Where a celebrity is paid to promote a business product.
People
All the business employees who are in contact with the business customers, who are representing the brand.
Methods of customer satisfaction
Train staff
Customer care strategy
Customer complaints procedure
After sale service
Deliver product to customers
Process
The system put in place to deliver a product or service to customers. (Delivery and communication)
Physical evidence
The physical features of a business that the customer can see, reassuring them they are purchasing from a high quality business.
Technology in marketing
Social media
Websites
Email
Database
