Marketing Flashcards
What is market led 3
Business develops products based on customer wants
High levels of market research carried out to determine customer wants
Market led business often exist in highly competitive markets
What is product led 3
Market research not as important
High levels of product research and development required
Often unresponsive to changing external factors
What is consumer behaviour
Thoughts of consumer and actions they take when buying products
What is 2 types of market research
Desk and feild
What is desk research
Involves researching and analysing info that has already been gathered
Examples - competitors websites, magazines, finnancial statements
Advantages of desk research 3
Time efficient
Cost effective
Available - info already exists so is easily available
Cons of desk research 5
Info collected by others so can be bias
May not be specific to what firms need to find out
Not consice researched may have to search through a lot of stuff to find what their looking for
May be outdated
Available to competitors
What is feild research
Gathering brand new info first hand, suitable and specific to exactly what firm want to know
Feild research pros 4
Gathers all info firm needs
Specific to what they want to
Up to date info
Not available to competitors
Feild research cons
Costly
Time consuming
What is random sampling and 2 pros n 2 cons
Randomly surveying people on phone
No bias in researcher
Saves time selecting randoms
Sample may not reflect target market
Can be over represented of a certain segment (eg men)
Can be expensive as many calls might have to be made
What is quota sampling and pros and a con
Researcher chooses from group of people with certain characteristics
Can select customers that reflect target market
Researcher bias could be involved as sample not randomised
Telephone survey pro n com
Easy to target respondents as can phone areas by numbers
Low response rate as customers see it as intrusive
Postal survey one pro 2 con
Easy to target customer segments as can send to affluent areas if expensive products
Survey may be seen as junk mail by customers and binned
Questions need to be simple quick and easy as can’t be clarified and also can’t be to long
Hall tests description pro and 2 con
Product is given to customers to try and feedback is gathered
Good quality feedback given on product
Customers opinions n feelings may be tough to analyse
Customer may feel pressured to be kind
Test marketing description 2 pro 2 con
New product launched in a regional area and reaction is monitored successful products then launched nationwide
Changes can be made before full launch
Money can be saved in a full launch if it fails in regional area
Customer opinions in regional market may not reflect nationwide opinion
Competitors may catch wind and copy product while it’s in regional stage
What is EPOS and 2pros 2 cons
Electronic point of sale - info on customer habits gathered through loyalty cards
Gathers vital info on how customers react to promotional price changes
Can help whether to influence whether to stock more or less
Expensive to set up
Time consuming to set up
4 aspects of marketing mix
Product price place promotion
6 stages of product life cycle
R and d
Into
Growth
Maturity
Saturation
Decline
Describe and comment on sales in profits in this stage - r and d
Research and development
Product being researched and developed. Prototype will be made and tested
No sales
Loss due to costs and no sales
Describe and comment on sales in profits in this stage - introduction
Product launched, promotional activities taking place
Sales slow to begin with as customers unsure of product
Profit still a loss due to high promotional costs
Describe and comment on sales in profits in this stage - growth
Awareness grows sales increasing
Sales rising rapidly
Profit product begins to make a profit
Describe and comment on sales in profits in this stage - maturity
Product been on market for some time competitors begin to appear
Sales peak
Profits peak
Describe and comment on sales in profits in this stage - saturation
Product begins to suffer due to high competition
Sales falling due to customers going to competitors
Profits falling rapidly
Describe and comment on sales in profits in this stage - decline
Products life nearing end, product will stop being produced
Sales still falling
Same with profits
Describe competive pricing and give a pro and con
Product set to similar price of competitors
Avoids price war
Other elements of marketing mix must be better than competitors to ensure sales
Describe skimming pricing 2 pro and con
Price set Hugh at start and lowered over time
Lack of completion allows price to be maxed
Hype around new product allows Hugh prove to be charged
Initial high prices can be off putting to some customers
Describe penetration pricing and give 2 pro and con
Price set low at start and raised over time
Encourages customer to try new product
Business can get a customer loyalty which means repeat business while lifting prices
Low profit during low price stage
Describe price discrimination and give a pro and con
Prices change dependant on a discriminating factor (age, time)
Allows for high profit margin on some brackets
Loss in potential revenue on some discriminations (age)
What is destroyer pricing and give a pro and con
When price of product is set at an extremely low price for a period of time to drive out competitors
Competitors forced out of market
Can only be used by bug companies that can afford to make a loss when prices are low
Describe loss leader and give a pro and con
One product in store set at a low and attracts customers into store where they buy other products
Greater footfall which increases chance of sale of other products
Risk customers will only buy the loss leader product which impacts profits
Channel 1 of distribution
Manufacturer-> customer
Channel 2 of distribution
Manufacture -> retailer -> customer
Channel 3 of distribution
Manufacturer -> wholesaler -> retailer -> customer
2 pros of manufacturer -> customer
Firm saves on overheads as don’t have to buy a shop
Customer gets direct feedback on product and availability
Pros of channel 2: manufacturer -> retailer -> customer
Retailer can demonstrate product
Retailer can display products in attractive fashion to induce sales
Customers can try products
3 pros of channel 3; fat one long one
Saves manufacture money on delivery costs as are making big ones to wholesalers rather than small ones to retailers
Saves manufacturer costs of holding stock
Wholesaler can also make sales directly to customers
What is direct sell on
Means selling directly from manufacturer to customer (channel 1)
3 pros of e-commerce
Sales 24/7
Global market
Entire product range can be shown
3 cons of edcomerve
Costs slot of time n cash to maintain a good websites
Customers might be scared of entering personal details
Firms may have to pay delivery costs
Name 4 methods of promotion
Promotional pricing - BOGOF, 2 for 1
Staff training - so staff readily answer questions on products
Free samples
Trade credit
Into pipeline promotions 5
Dealer loaders
POS merchandise
Trade credit
Staff training
Sale or return
Describe a star
Products that have a high market share in a high growth market
Describe cash cows
Products that have a high market share of a low growth market
Describe question marks
Products that have a low market share with Hugh growth potential
Describe dogs
Products that have a low market share of a market with low growth
What’s the impact of stars on a firm 2
Stars need constant investment to keep a head of market
Stars allow a firm to be a market leader
What’s the impact on a firm of cash cows
Require little marketing expense due to lack of competition
What’s the impact on a business of question marks
Question marks should be invested in due to their position in a promising market
Need development of a string marketing mix if want to be come stars
What’s the impact of dogs on a firm
Dogs can adversely affect products
What is into pipeline promotions
Sales promotions offered by manufacturer to retailers to purchase products from them
What are 4 into pipeline promotions
Trade credit
Sale or return
Dealer loaders- discounts that encourage retailer to stock new product
Staff training - supplier cam offer free training to retailers on their products to help retailer increase sales
What is Out of pipeline promotions
Sales promotions are offered by reatailers to encourage customers to purchase products
Name 4 out of pipeline promotions
BOGOF
free gifts
Loyalty schemes
Competitions
