Marketing Flashcards
Market Skimming
Price is high then lowers over time eg. iPads or iPhones
Penetration
Low price then increases over time eg. ‘trial prices’ on new chocolate bars
Destroyer pricing
An illegal practice were the price is deliberately set extremely low for a period of time to force out competitors.
Other companies physically can’t compete with the low prices
Competitive pricing
Prices are set similar to the competitors. Eg. Fuel prices
Avoids a price war and encouraged competition.
Loss leaders
A promotional price on one or more products which are set so low in order to entice customers in to buy other normally priced products
Price descrimination
Prices change depending on a discriminatory factor eg. Child tickets are cheaper than adult tickets on buses and trains.
Cost plus
Calculate the unit cost of a product then add a percentage mark up for profit.
Eg. Unit cost £50, 50% markup for profit, therefore they sell the product for £75.
Psychological
The price of a product is set just below the next rounded number eg £49.99 instead of £50.
Makes the customer think the product is much cheaper than it actually is.
Trade credit (into- the-pipeline)
Manufacturers/suppliers offer retailers credit to pay for goods at a later date.
Point-of-sale (POS) materials (into-the-pipeline)
Free posters and display materials are given to retailers to display products to customers.
Sale or return (into the pipeline)
Suppliers give retailers the option to return goods that do not sell.
Dealer loaders (into the pipeline)
discounts used to encourage retailers to stick up on a product eg. Buy 10 boxes get one free.
Staff training (into the pipeline)
Suppliers can offer retail staff free training to give them the knowledge and skills to sell the product.
Special offers (out of pipeline)
Short term promotions set on selected items. This can include BOGOF, buy one get one free.
Free gifts (out of the pipeline)
Used to tempt customers to buy a product again or for the first time eg. Toy in children’s cereal.
Vouchers and coupons (out of pipeline)
Usually given in newspapers or magazines to give customers money off future purchases.
Loyalty schemes (out of pipeline)
Allow customers to collect points by making purchases, which at a later date can be exchanged for discounts or free products in the future. Eg. Tesco club card
Interest free credit (out of pipeline)
Retailers offer customers credit to pay for goods at a later date.
Free trials (out of pipeline)
Services like Netflix and audible offer a free trial for a month. Customers can try the product then if they like it, will purchase it at full price.
Competitions (out of pipeline)
Businesses can use competitions to encourage customers to buy something in order to take part
Eg. Monopoly at Mc Donald’s
Trade shows and events (out of pipeline)
Attending industry trade shows or events such as the Royal Highland Show to give out samples and to engage with the public.
Advantages of Varied Product Portfolio
Spreads risk over difference markets.
Range of products increases awareness of the brand as a whole.
Easier to launch new products with a large existing portfolio.
Disadvantages of Varied
Product Portfolio
Bad publicity surrounding one product can affect the whole portfolio negatively.
High marketing costs to promote so many varied products.
High costs in researching and developing so many products.
Random Sampling
Sample is picked randomly eg. Using a telephone directory or a list of customers.
Adv of random sampling
No bias is shown by shown by the researcher.
Saves time in selecting the sample
Disadv of random sampling
Sample may not reflect the target market.
Can overrepresent a certain segment eg. All males could be chosen at random accidentally
Can be expensive as many calls may have to be made if customer lists are not up to date.
Quota sampling
Researches chooses from a group of people with certain characteristics eg. Males 20+
Adv quota sampling
Quick and easy method as group lists are pre made.
Can select customers that reflect the target market.
Disadv quota sampling
The exact sale from each group is not randomised so researcher bias could be involved.
Desk research adv
Timely - deals info is quick to gather
Cost effective - does not require trained and paid interviewers or research companies.
Available - already exists to easy to look up
Desk research
Involves researching and analysing info that has already been gathered.
Desk research disadv
Not objective - collected and presented by someone else, could be biased
Not appropriate- may not be fit for exact purpose and may have to be altered to fit the businesses needs
Not concise - the researcher may have to read through a lot of info to get what is needed.
Field research
Involves gathering brand new info that is suitable for the business’s exact needs.
Field research adv
Complete - no parts of the info is missing
The info is up to date
Appropriate - fit for the purpose it is needed for
Accurate - information should be correct as it can be validated
Field research disadv
Costly - requires trained and paid interviewers or expensive research companies
Online survey
Field - a website or email is used to ask customers questions
Telephone survey
Field - a market researcher telephones customers usually at home, and asks them questions.
Postal survey
Field - a survey is sent to customers through the post and is posted back once completed.
Personal interview
Field - often conducted as a street survey or by ‘cold calling’ customers’ homes and asking them questions.
Hall tests
Field - a product is given to customers to try and their feedback is gathered
Focus groups
Field - a group of customers is brought together and asked to answer and discuss questions put forward by a market researcher
Test marketing
Field - a new product is launched in a regional area and the reaction is monitored. Successful products are then launched to a wider market.
Electronic point of sale (Epos)
Field - Information on customer preferences and habits is gathered as their loyalty cards are swiped through electronic told. Used in conjunction with loyalty schemes to match purchasing information with customer details.
