Marketing Flashcards
Explain Market Segmentation and give examples of different market segments
Market segmentation groups consumers together by common characteristics, eg, gender, age or lifestyle. It helps a business to more effectively target its marketing to a specific group of customers.
Markets can be segmented by Age, Gender, Occupation, Lifestyle, Location, Income and Religion.
Describe the benefits of Target Marketing
-Products can be varied to suit different market segments
-Allows appropriate prices to be set depending on market
-Ensures products are sold in right place for the target market
Give reasons why Market Research is important to an organisation
Market research provides information about:
the size of market
rival businesses
customer needs and wants
Explain Field (Primary) Research, giving advantages and disadvantages
Field research gathers first-hand information for a specific purpose. Examples are face-to face interview, postal survey, hall test, observation, online surveys.
Advantages: Only the organisation that collects data has access to it. Information is targeted and very specific.
Disadvantages: Expensive and time consuming to gather.
Explain Desk (Secondary) Research, giving advantages and disadvantages
Desk research uses information that has already been collected by someone else and is used by another organisation. Examples are industry sales figures, websites, newspapers, commercial publications and government reports.
Advantages: Saves time, usually inexpensive and widely available.
Disadvantages: Not specifically gathered for the business, it may be out of date and it may contain bias.
Different methods of market research
Online survey- can be hosted through internet or social media
Adv- easy to collect and analyse and no printing is required
Disad- may not take it seriously and start guessing
Focus Group- where people come and review product
Adv- you can go as in detailed as you like
Disad- expensive to organise and conduct
Interviews- where researcher talks face to face with somebody
Adv- questions can be developed
Disad- can be time consuming and answers can be of no use to interviewer
Define the term ‘Marketing Mix’
The marketing mix describes the interaction between 4 key elements of marketing: product, place, price and promotion.
Explain the term ‘Product Development’ and describe the various stages
Product development is the process of taking a business from an idea through to launching it on the market. Development of a new product involves a number of different stages. This includes:
idea generation and development
prototyping
testing
modification
patents and copyrights
launching to market
Explain the term ‘Product Life Cycle’
During their lifetime all products go through different phases or stages, which is known as the product life cycle. The number of sales and the length of a product life cycle might be different for different products, but all products share a general pattern of growth and decline. This cycle can be shown on a graph of sales over time.
Describe the main stages of the product life cycle
Development – Research and development and testing take place. Prototypes are built and modified before a product is ready for launch.
Introduction – Product is launched on the market. Advertising costs will be high in order for the product to get noticed.
Growth – Sales rise and a profit may be made if research and development and advertising costs have been recouped.
Maturity – Sales are at their highest and profits are maximised.
Decline – Sales begin to fall, sometimes as a result of new competitors, or the new products, changes in fashion or lifestyle.
Describe different strategies for extending the life cycle of a product
When a product reaches the decline stage, a business can act to extend its life cycle:
change the product in some way
change the price, usually reducing it
change the place it is sold – find new markets for the product
change the way it is advertised or promoted
change the packaging
change the name
Brading Benefits and Costs
Benefits
-brands are easily recognises because of logo and colours
-can become easier to add products to business product portfolio as brand is already well known
-Customer will pay higher price because they think it’s of high quality
Costs-
- you can become open to imitations/fake products
-a single bad event, with b ad publicity can affect reputation of the whole range
- takes a long time and can be expensive to to promote business and build a successful brand
Marketing Mix
Place- where business sells its good and services to customers
Promotion- this is the way the business make consumers aware of their goods/services
Price- how much the customers pay for the product
Product- this is the good/service the customer gets
Factors affecting price
-the price of competing products
-the quality of the product
-how much it cost to make
-how much profit you want to make
Describe and give examples of different Pricing Strategies
-Destroyer Pricing - prices kept very low to eliminate the competition.
-High/Premium Pricing - using a high price deliberately to signal luxury or quality. Sales will be lower but there will be a high profit margin on each sale.
-Low/Value Pricing - a long term pricing strategy setting the price below the market price in order to attract customers. Customers will often look for the product that is cheapest as a way of saving money.
