Marketing Flashcards
Marketing
all the business activity geared towards correctly identifying and anticipating people’s wants and needs,
Marketing activities include
Market research
Packaging
Branding
Sales promotion
Advertising
Distribution
Difference between market and marketing
A market is a situation in which buyers and sellers interact to determine a price at which transactions will take place. Marketing however, is the link between the producer and the market. Therefore, the activity takes place in the market.
Marketing mix
the blend of different marketing activities undertaken to market a good or service successfully.
Product
2. Price
3. Place
4. Promotion
product
refers to the good or service that is needed by the targeted group, or the good, idea or service that the firm wishes the targeted group to buy, example, school books and students; toys and children.
Aspects of the product include:
a) Packaging
b) Labelling
c) Branding
The Roles of Packaging include:
To attract the attention of the customer
To protect the product
To advertise the product
To provide information about the product
b) Labelling
The use of labelling is an integral part of packaging. This may be a small tag attached to the product or a complete design within the package. The product label must state the following:
The registered office or country of origin
The expiry date if it is a food it is the name, term, sign, symbol or design that differentiates the product of a company from that of its
competitors.
This is the part of a brand that can be vocalized, that is, a spoken name, example, AVON.
Brand mark
This is that part of a brand which can be recognized visually, such as, a symbol, design or distinctive colouring or lettering.
Brand Loyalty
Customers who had a good experience with a particular brand may become brand loyal or faithful by repeatedly purchasing this product over time.
Copyright protects the expression of an idea. Copyright protection gives a legal right to the creator of an original work that allows them control over how they grant permission to use and distribute it.
a patent
is a right granted by the government to the owner of an invention.
Price
Pricing Strategies include:
Cost-based/Cost-plus pricing – this is where the price is based on the unit cost of production plus a mark-up. The cost of production is made up of fixed costs and variable costs.
Penetration pricing/introductory pricing – this is where the initial introductory price is lower than competing products in order to encourage consumers to buy the product. The price eventually increases as it gains popularity.
Predatory pricing – this a pricing policy whose aim is to get rid of unwanted competition. The price keeps dropping until the competitors are out of the market.
Psychological pricing – this is where forms will keep their prices just below certain levels so that they appear cheaper to the customer, for example, charging 99 cents instead of one dollar.
Limit pricing – this is a pricing technique which sets prices only low enough to discourage the entry of competitors into the market.
Loss leader pricing – this pricing strategy involves significantly reducing the price of a popular brand in order to attract customers into a business premises so that other products can get exposure.
Place and distribution
Place and Distribution
Place as a market variable concerns the means through which the product reaches its target market, in other words, the means of distribution and transportation internally and externally in a country.
Distribution is the link between the producer and the consumer. Various channels can be used to distribute the products to consumers which are known as the chains of distribution. A chain of distribution can either be direct or indirect. The chain of distribution is indirect when there are intermediaries/middlemen, such as, the retailer, wholesaler, etc. and direct when there are no intermediaries/middlemen.
Chains of Distribution/Channel of Distribution include:
Chain 1 – direct chain (direct marketing)
Producer → Consumer
Place and distribution
Producer → Retailer → Consumer
When sales are in small quantities or relatively low priced, the producer may find it more profitable to supply retail outlets from which a consumer purchases the product.
The Roles/Functions of a Retailer include:
The retailer provides a convenient outlet near to targeted markets.
The retailer provides feedback from customer to producer.
The retailer gives advice to customers.
Examples of Retailers include:
Supermarkets
Department stores
Market vendors
Chain 3- indirect chain
Producer → Wholesaler → Retailer → Consumer
In this channel of distribution the producer benefits from selling goods in large quantities to the
wholesaler, who then subdivides this for further distribution to retailers.
The Roles/Functions of a Wholesaler include:
Breaking bulk – this is buying in large quantities and subdividing for further distribution.
Holding stocks – most retailers do not have the storage capacity for large quantities.
Bearing risks – the wholesaler takes a risk by buying in large quantities because prices could fall while goods are
in his possession, or fashion or taste may change suddenly.
Chain 4 – indirect chain
Producer → Wholesaler→ Consumer
In this channel the wholesaler buys in bulk and sells to consumers in large quantities.
Factors determining or influencing the channel of distribution selected:
Perishable, fragile or bulky products – a shorter distribution channel should be used for these types of product since they are prone to spoilage and damage, especially when lengthy transportation is required.
Target market location – if the target market is geographically dispersed, then the use of intermediaries may be
required to effectively reach them.
Resources and competencies – if the company does not have the resources and competencies to set up its own distribution outlets, then the indirect channel is the best option. The producer can concentrate on production and leave the selling and distribution to those who are better at it.
Problems of Distribution and Solutions
Theft Theft insurance
Low productivity Incentive schemes, increased on-the-job training, better working conditions
Spoilage Better packaging, refrigeration and storage
Red Tape Streamlining of operations
Inconsistency in measure Standardization
Methods of Retailing/Recent Trends in Retailing include:
Telemarketing – this is a form of direct marketing where sellers randomly choose individuals to contact via telephone to inform them about products and attempt to solicit sales.
E-business/E-commerce – this involves the buying and selling over the Internet.
Advantages of e-commerce include:
- Customers have the benefit of greater variety products.
- Customers can shop 24 hours a day, seven days a week.
- Retailers can quickly respond to customer queries or complaints online and provide them with current
Disadvantages of e-commerce include:
- Customers are unable to see, touch, experience or inspect the products before purchase.
Damaged goods are often difficult to replace, and customers are often required to pay a return shipping fee.
This refers to the promoting or the act of attracting the attention and interest of the target market to the product or service offered for sale.
Promotional Strategies include:
a) Advertising
b) Sales Promotion
c) Public Relations
Advertising include:
To highlight unique features of a product.
Increase market share by stimulating demand.
To educate consumers about the product to build a firm’s image around its product
To introduce new products to the market.
Advertising Media/Vehicles of Advertising include:
Social Media – this refers to collections of online communities where users can create ideas, share information, personal messages and other content.
Benefits/Advantages of using Social Media include:
- It is very cost-effective; several of the most popular platforms for social media, example, Facebook, Twitter and LinkedIn, are free.
- The business would have a global reach with social media, that is, 24 hours a day, seven days a week.
- It is a good communication tool to inform ‘followers’ of new things that the business will be doing, especially
ones which will promote a good public image.
Print media - newspapers and magazines are the most common media of advertising, and because of the many
advertisers are fairly cheap.
Electronic media – these include advertising on the radio and television, and are usually expensive. Telemarketing
can also be included in this category.
Billboards – these are becoming popular in the Caribbean and are place along busy freeways and sporting arenas.
Other vehicles include:
Types of data
Primary data – are data that have not been collected by anyone before, in other words, they are original. And is also referred to as field research. Examples, surveys, interviews and observations.
2. Secondary data – describes information compiled by others which can be accessed at any time or by any interested party and is also referred to as desk research. Examples, financial statements in newspapers, business journals, magazines, etc.
