Marketing Flashcards
What is Marketing?
THE CUSTOMER
What is Market Segmentation?
Market Segmentation is what is used for a business to ensure:
* the product/service provided meets the specific needs and wants of the customer
* the product/service is available in approriate places for the customer to access it
* the price for the product/service is appropriate for the target market
* the promotion and advertising is targeted towards to the correct customers to maximise the chance of success
THE CUSTOMER
The Factors of Market Segmentation:
Age
* individual’s needs and wants change as they get older, so the market is split into age ranges, e.g. 0-5 years
Income
* the market is split based on the income earned or the social class, e.g. working or upper class
Gender
* the market is split by gender, i.e. male or female, as they tend to have different intrests and preferences
Lifestyle
* the market is split based on how individual’s choose to lead their lives, e.g. sportswear, fashion
Location
* the market is split based on the needs of individual’s living in different areas, e.g. smaller cars are aimed to those who want to keep costs limited and areas where parking is limited
Occupation
* the market is split based on the needs of different occupations, e.g. an accountant will have different needs compared to a joiner
Religious/Cultural Beliefs
* the market is split based on the religions and cultures of individual’s, e.g. Halal meat will be promoted more to those who practise the Muslim faith
MARKET RESEARCH
Benefits of Market Research:
- to stay ahead of the competition
- to anticipate future needs of customers
- to find out the needs and wants of customers
- to advertise the product/service appropriately
If this is done successfully, sales revenue (income) and profits will increase.
MARKET RESEARCH
What is Desk Research?
Already existing (secondary) information and was collected for a specific purpose by someone else.
MARKET RESEARCH
Advantages and Disadvantages of Desk Research:
Advantages
* cost effective - cheaper to gather than field research
* far less expensive to implement than primary research
* as the information already exists it is easy and less time consuming to obtain
Disadvantages
* may contain bias
* may be out of date
* information also available to competitors
MARKET RESEARCH
Methods of Desk Research:
Internal
* analysing customer complaints
* studying past trends in sales figures
* examining customer records, e.g. Tesco Clubcard
External
* internet
* newspapers
* competitor’s websites
MARKET RESEARCH
What is Field Research?
New and first-hand (primary) information gathered by the business itself for a specific purpose.
MARKET RESEARCH
Advantages and Disadvantages of Field Research:
Advantages
* not available to competitors
* the information is up to date
* the information has been gathered for a specific purpose and is therefore relevant
Disadvantages
* it is time consuming to gather
* data must be analysed once collected
* collecting the information is expensive
MARKET RESEARCH
Methods of Field Research:
Observation
* watching something and recording what happens; the observer might have to count how many times something happens, someone does something, or what someone’s reaction is to a situation
Online Survey
* when people answer questions, giving ratings or comments electronically
Mystery Shopper
* poses as a customer to research the level of customer service offered
MARKET RESEARCH
Advantages and Disadvantages of Methods of Field Research:
Observation
Advantages
* facts and figures are gathered - easier to analyse than thoughts and opinions
* people being observed might not be aware so should act naturally
Disadvantages
* only shows actions, not thoughts or feelings
* there are privacy and ethical issues to consider when observing people
Online Survey
Advantages
* more cost effective than other methods
* a link to the survey can be sent to large numbers of people via email
Disadvantages
* many people will ignore the survey
* relies on respondents having a connection to the Internet
Mystery Shopper
Advantages
* can give a true picture of service
* can be used to gain information on competitors
Disadvantages
* insufficent or biased data
* workforce anxiety - always on edge that customers could be MSs
* can be expensive if third party employed as a mystery shopper
THE MARKETING MIX
What is the Marketing Mix?
Product
* good/service produced by the business and then sold to customers
Price
* how much a business charges customer for the product - different pricing strategies are used depending on the circumstances
Place
* where the product is sold
Promotion
* how customers are told that the product exists, e.g. advertising, special offers
PRODUCT
What is it?
This is the product (or service) produced by the business to be sold onto the customer. It must meet the needs/wants of the customer, or they will not buy it - market research will help the business to identify this.
When developing a product a business must consider;
* value for money, (Price v Quality)
* taste, e.g. texture, flavour, ingredients
* physical appearance, e.g. size, shape, colour
* packaging, e.g. eye catching, environmentally friendly
* unique Selling Point (USP), i.e. what makes your product different to existing products
PRODUCT
Product Life Cycle:
PRODUCT
GAPTAP:
G: Generate the idea
* 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.
A: Analyse the idea
* examine the product suggested to identify if it’s feasible to make, e.g. do the business have enough finance, trained staff, etc. Managers will then decide whether the product can be made.
P: Produce a prototype
* 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.
T: Test the product
* use test marketing or a focus group to ask the consumers views of the product. Collect feedback.
A: Alter the product
* make changes based on the market research to ensure the product is the best is can be. This will reduce the risk of failure.
P: Produce the Product
* start production of the product.
* advertise and promote the product so that consumers are aware that it exists.
PRODUCT
Introduction:
During this stage, few consumers know about the product when it is launched onto the market. Initially, sales and profit are low. The aim is to raise awareness of the product through promotional activities, e.g. advertising, free samples, or a special introductory price.
PRODUCT
Growth:
Sales increase rapidly as more customers become aware of the product as a result of the promotional activities. Profits also increase as the product becomes more popular.
PRODUCT
Maturity:
This is the most profitable stage of the product life cycle as sales have reached their highest point. Competitors may enter the market and the pricing strategy may have to be reviewed to retain customers.
PRODUCT
Decline:
Sales of the product fall as demand for the product decreases. A business can try to extend the product life by bringing out newer or adapted versions, e.g. Dairy Milk, Dairy Milk Oreo, Dairy Milk Creations.
PRODUCT
Extending the Product Life Cycle:
To prevent a product declining, and to extend the life of the product, a business can take a number of actions including;
- increase channels of distribution
- develop a wider range of products
- finding new uses for existing products
- promoting more frequent use of the product
- developing new markets for existing products
- re-launch the product with new image/packaging
- offer promotions to remind consumers of product
When extending the product life cycle the business will have to alter at least one of the 4Ps.
PRODUCT
What is Branding?
A brand can mean a logo, a name, or slogan that can only be used by the business which has registered it. Branding is used to build brand loyalty and plays an important part in promotion. As customers, we associate branding with high quality products and therefore are charged a higher price.
PRODUCT
Advantages of Branding:
Advantages
* gives an impression of quality and reliability
* creates a unique identity and is instantly recognisable to customers – competitive advantage
* the brand name can increase the value of the business
Disadvantages
* bad publicity for one product in the brand can negatively affect the whole brand name
* brands must invest in research and development and advertising to remain competitive
* some brands are likely to be copied, fake versions can appear on the market for cheaper
PRODUCT
Own Brand Products:
When a business produces and sells their own version of a product. Usually, the brand is the name of the retailer.
Own brand products are usually of similar quality to well-known brand and have similar packaging but are usually less expensive than the branded products.
PRODUCT
Advantages and Disadvantages of Own Brand Products:
Advantages
* gives customers more choice
* usually cheaper than branded products therefore popular with customers
* very little advertising required as own brand is well known, e.g. Tesco
Disadvantages
* can be viewed as a copy or imitation of a brand
* sometimes seen as poorer quality compared to other brands