MARKETING Flashcards
Strategic role of marketing
Plan, Price, Promote and Distribute products, services and ideas to customers → achieve business objectives
enhancing revenue + increasing market awareness
effective marketing = long term business success +profit
operations and marketing interdependence
produce the required quantities to match marketing promotions
Q affects marketing decisions by determining the capabilities and constraints in pricing, product design, promotion etc.
finance and marketing interdependence
finance to source funds for marketing to fund promotional campaigns.
Q marketing strategies are judged using financial criteria ie sales, market share and profitability analysis
HR and marketing interdependence
Depends on HR to attract, retain and train marketing workers
Q Developing job descriptions and designing training programs.
production approach
Customers prefer products they can afford →improving production methods and distribute goods and services efficiently and effectively
selling approach
designs goods they think consumers should want
use promotion to convince potential customers they they need the products
the marketing approach
Business focus on consumer needs and wants → customer = first priority
customer orientation
Business strives for customer satisfaction → development of marketing decisions based on customer’s changing needs
relationship marketing
Priority of customer retention → rewards programs, after sales services
resource market
Sale of raw material → agriculture, fishing mining etc.
Provide high quality at a cheap price → marketing is usually undertaken by the industry as a whole e.g. meat and livestock australia
intermediate markets
Goods for reselling or renting
Goods made by other businesses
Wholesalers and retailers e.g. myer
consumer markets
Products made for consumers (not for resale or further production)
individuals/households consume the products
Sellers use an array of marketing techniques to make a profit
mass markets
Large general marketing → promotes a large amount of one product → all consumers are the same
Fruit, food, cars etc (no vary in demand)
Businesses aim to sell as much as possible → requires strong branding
niche markets
Smaller markets for specialised goods → only few people interested/can afford
IKEA = niche → modern scandinavian design
situational analysis
gathering and studying aspects of the business
purpose of marketing
- increase customer awareness
- focus on target markets
- satisfy the needs and wants
market research
Gathering of information about a specific topic, group, product or social issue with a specific purpose in mind → assist decision making
data collection
primary - gathering its own information directly from - - Surveys, experimental research, observational research
secondary - gathering research from already existing sources.
- internal sources - accounting, sales reports - within the business
- external sources - media, government
undifferentiated marketing
business provides one product for the whole market and is taking a mass market approach.
differentiated marketing
group their customers according to different characteristics such as age, income level, family size etc.
concentrated marketing
some businesses select just one part of the total market ie ferrari
geographic segmentation
when the market is divided into different geographical units
demographic segmentation
when the market is divided into groups based on variables such as age, gender, family size, income, education etc.
psychographic segmentation
this is when buyers are grouped according to, socioeconomic status (occupation, income and education), lifestyle ( interests and hobbies) or personality
behavioural segmentation
when buyers are grouped based on their knowledge of the product, their attitudes towards it, the way they use it and their responses to it.
Qantas mainly uses behavioural segmentation to select its target market. Buyers are distinguished according to trip purpose eg business and leisure/ travellers.
product/service differentiation
Differentiation involves providing greater customer value and making the product stand out clearly from that of competitors.
positioning
how consumers perceive the product in terms of the relationship between product quality and price.
By positioning in relation to its competitors i.e. launching Jetstar has eroded some of the market share held by virgin
IKEA positions its products at the lower end of the furniture market as the products are cheap compared to their competitors
branding
A brand can be a name, term, symbol or special design that identifies a good or service of a seller.
generic branding strategy
this uses a non brand name and very plain packaging. Businesses usually use this strategy when they want to position their product as low cost, i.e. Woolies select
individual brand strategy
with this each major product or product line is given its own brand name. A separate name can be used for many different products which are made by the same producer, ie Omo, Lux, Drive, Surf and Softy are all made by Unilever.
family brand strategy
this groups all of a business’s products under one single brand name. This allows one image to be created and promoted, leading to increased awareness of the business and its products
packaging
Packaging is the activity of designing and producing a container or wrapper for a product.
- persuade consumers to purchase the product
to protect purchasers by
- using anti-tampering devices and child safety caps
family packaging
distributing several products in a similar way e.g. cadbury
changing the packaging
a business may decide to change the packaging of a product in order to improve the quality
reusable packaging
often used as a marketing technique, it stimulus repeat customers
multiple packaging
this is when several items are packaged as a unit ie toilet paper
cost pricing
markup on original price to cover costs
qantas determines cost of production then adds markup for profit
market pricing
business looks at how much it thinks the consumers are willing to pay
competition based pricing
when a business sets its price in relation to a similar product from a competitor
qantas monitors airlines such as virgin australia prices
market skimming pricing
high price when entering the market used for first class and flights straight from perth to london
market penetration pricing
low initial price when entering the market → large number of sales immediately
used for jetstar
main strategy used by IKEA
loss leaders
some goods set below cost price to attract customers
sydney to melbourne as low as $19 to compete with tiger air
regularly used by IKEA
price points
psychological price e.g $9.95 instead of $10 all IKEA products are priced ending in .99
personal selling
advantages:
Explaining product benefits, demonstrate product correctly, answer questions
Disadvantages:
Leads to high costs
Q Sales representatives sell directly to travel agents, businesses and government departments
IKEA Representatives are available to assist customers
advertising
Mass communication where the product is clearly identified → TV, radio, billboards etc.
Q Uses less blanket advertising and more direct however many people receiving the message are not in the target market
IKEA Catalogue printed in 208 million copies in more than 30 languages
publicity/public relations
Non paid form of advertising → good image with business market and general public
Publicity: provides nw or information to the media that relates to the business
Q Has used John Travolta as brand ambassador, sponsoring sports for team travel and foundations
IKEA UNICEF’s largest global partner → support through soft toy campaign
intensive distribution
where the product is available at every possible outlet, ie soft drink
selective distribution
widely distributed but not intensive
exclusive distribution
limits supply → very expensive to achieve elite image
customised pricing
consumers in different countries are charged different prices for the same product. This is commonly used due to the added expense associated with exporting ie apple
market-customised pricing
This sets the price according to local market conditions. It is more flexible.
standard worldwide price
charging customers the same price for a product anywhere in the world.
global branding
Name, term sign or logo that distinguishes one product from competitors
Global branding improves margins → drives down packaging design and advertising production costs
Global logo has the same colours as swedish flag to create sense of familiarity
Flying kangaroo creates instant recognition → safety, reliability, engineering
standardisation
Offering the same product on a worldwide basis:
→ Customer interests are similar worldwide
→ Customers are willing to sacrifice product features and design for price
→ Economies of scale can be achieved through supplying globally
Q Uses standardisation to capture greater share of market → same product design, brand name packaging etc
IKEA Standardisation lead to greater economies of scale → lower prices → more profit
differentiation
Used to stand out from competitors → reflect individual customer needs in different countries
IKEA had to customise european products to fit american market
Q Asian flights include asian meals and fluent asian speakers
SWOT
Strengths - internal advantages
Weaknesses - internal disadvantages
Opportunities - external advantages
Threats - external disadvantages
product life cycle
introduction
growth
maturity
decline
marketing objectives
increasing market share
develop new products and services
expand existing markets
expanding sales through export markets
increase domestic flights as state borders have reopened
resume international flights
product marketing
the strategy relating to product, deals with the particular product that the business is selling to capture the target market
product marketing
the strategy relating to product, deals with the particular product that the business is selling to capture the target market
price marketing
this is crucial when developing a marketing strategy because if customers do not accept the price of particular products then all other efforts relating to the good have been wasted
promotion marketing
this can take on many forms such as personal selling, mass selling and sales promotion. It is the role of the marketer to blend these different types of promotion to achieve optimal results
place marketing
getting the product in the right place at the right time
implementing, monitoring and controlling
Implementation - marketing plan is put into operation
Monitoring - ensuring business objectives are being achieved
Controlling - keeping the business informed about its performance
psychological factors
motivation
perception
lifestyle
personality and self concept
learning
attitudes
socio cultural factors
culture
subcultures
family
reference groups
consumer defenition ACL
Section 3 of ACL 2010: consumer = person who acquires goods or services priced under $40,000 for personal, domestic or household consumption
deceptive and misleading advertising
Section 18 of the ACL prohibits a person from engaging in misleading or deceptive conduct
Bait and switch advertising - product advertised as reduced with only a limited number in stock → does not notify consumer →attracts sonumer to store to offer similar good at higher price
price discrimination
Setting of different prices for products in separate markets
Q Fined by ACCC after colluding with airlines to fix fuel surcharges on its freight services to the US.
implied conditions
Contractual terms which have no been expressly stated but courts are willing to enforce
Part 5-4 of the ACL states consumer can seek a refund, replacement or repairs if a supplier fails to satisfy obligations in relation to consumer guarantees
Q Fined $2m in 2019 for misleading consumers about their rights to refunds when a jetstar flight was elated or cancelled
warranties
return products if they become faulty during a specified period
effective marketing tool for businesses, especially if they advertise extra warranty
The extent of the guarantee given for each product is described alongside each product. IKEA will examine the product and choose either repair or replace the product
truth and accuracy, good taste in advertising
Promotional material should be true, accurate and in good taste
Truth and accuracy are legal requirement while good taste is an ethical issue
IKEA has come under fire for airbrushing women and girls out of its catalogues in Saudi Arabia. “We are looking into the issue and holding a dialogue with our Saudi franchise holder,” said, a spokeswoman for inter ikea systems.
Engaging in fair competition
Section 45 of the ACL prohibits contracts, arrangements or understandings containing a provision which has. the purpose, effect or likely effect of substantially lessening competition.
Fostering the competitive environment to giver consumer diversity of choice quality and service
sugging
selling under the guise of research.
unethical because the research motive is misleading to the consumer
when a product marketer falsely pretends to be a market researcher conducting a survey, when in reality they are simply trying to sell the product in question
Qantas was accused of ambush marketing during the sydney 2000 olympics when it linked itself to the olympics despite not being an official sponsor
