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Business studies > Marketing > Flashcards

Marketing Flashcards

1
Q

The Marketing Function (definition)

A

The on-going activities of the business to reach the target market (LSM) and the methods the business utilises to connect and engage with its target market.

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2
Q

Why is Marketing important ?

A

It builds a brand in the minds of the consumer
(constant reminder)

Marketing is used to gain and retain customers.

Create a “marketing buzz” around the product/service

Engaging with customers via marketing → the
opportunity to listen to the customer’s feedback → to
build a stronger brand.

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3
Q

Marketing as part of the overall business strategy:

A
  • strategic planning
  • marketing strategy: brand imagine
  • implementing marketing strategy
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4
Q
  • strategic planning
A
  • vision
    -mission
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5
Q

Marketing strategy: BRAND IMAGE

A

-Identify the overall market scope
-Determine the USP
-Determine the marketing budget

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6
Q
  • implementing marketing strategy
A

-Marketing of the product / service
-Evaluate the effectiveness

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7
Q

name the 3 marketing strategies

A
  • marketing the overall brand
  • marketing the product/service
    -marketing both the brand and the product
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8
Q

Five-steps when formulating a marketing strategy

A

1.Perform an environmental scan
2 Define the target market and Unique Selling Proposition. (USP)
3 Determine the marketing budget.
4 .Implement the marketing mix to achieve the aims.
5 Evaluate the effectiveness and take corrective measures

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9
Q

1.Perform an environmental scan

A
  1. Internal Analysis (SW, Value chain, Resource based analysis, USP)
  2. External Analysis (Industry, competitors, customers)
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10
Q

External analysis has 3 sub-sections namely:

A

industry analysis
competitor analysis
customer analysis

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11
Q

industry analysis

A

=Assessment/scanning of the sector that the business operates in.
=Identify opportunities and threats → PESTLE

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12
Q

industry analysis

A

=Assessment/scanning of the sector that the business operates in.
=Identify opportunities and threats → PESTLE

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13
Q

competitor analysis

A

=An overall picture of all the competitors in the market.

=Evaluates the competitors’ strengths and weaknesses

=Porter’s Six Forces Model
-Level of rivalry in the marketing
-Threat of new entrants in the market
-Substitute products & -Complementary products

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14
Q

MARKET MAPPING

A

=A visual representation of market conditions/trends.
=The position that the different competitors hold → are plotted on a map → to help the business to identify its own position within the marketplace relative to those of competitors.
(see slide 16)

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15
Q

Customer analysis: (power of the buyer)

A

=Looks at current and potential customer’s → see where their needs are not satisfied.
=Analyzing the customer base →help identify the potential market segmentations (LSM-groupings)

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16
Q

what does it mean for people for people moving up the LSM index

A

=higher levels of disposable income.
=money available for luxuries.
=higher standards of living.

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17
Q

The purpose of LSM groupings (LSM 1- LSM 10) is the following:

A

=to gain an understanding of the different market segments.
=to assess how these groups spend their money → satisfy. their needs.
=to group consumers with similar spending patterns.

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18
Q

The different retailers selling household items in South Africa, their target markets are as follows:

A

Shoprite 4-7
OK BAZAAR 5-7
Pick n Pay 4-10
Woolworths 8-10

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19
Q

the internal analysis has to do with the business functions

A
  • elements which are internal to the business
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20
Q

what can be used to help understand the internal market environment

A

=swot analysis
=value chain analysis
=resource-based analysis

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21
Q

Step 2:Define the target market and Unique Selling Proposition. (USP)

what are the factor(s) that will differentiate the business’ product I service :

A

Price
Brand identity
Utilization I incorporation of technology in the use of the product I service
Quality

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22
Q

Step 3
Determine the marketing budget.

A

direct marketing
-direct mail
-e-marketing
-web marketing
-web pages
-mobile marketing
-billboard
-television
-radio

=Often seen as an expense
=The amount of money spent on marketing will be determined by the methods of marketing communication used.
=Advertising on TV → expensive
=Not only should the costs be considered → the effectiveness of relaying the message to the target market.

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23
Q

Step 4
Implement the marketing mix to achieve the aims.

name the 4 things in the ,marketing mix

A
  • product
    -price
    -place
    -promotion policy
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24
Q

name the 3 additional p’s taht form part of the marketing mix

A

people
physical evidence
processes

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25
Q

name the elements that form part of the promotion policy

A

advertising
sales promotion
personal sales
publicity

(they all form past of the marketing communication mix)

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26
Q

product
name the types of products that can be sold

A

convenience goods
select goods
specialty good
services

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27
Q

convenience goods

A

=not very brand-loyal
=make the purchase as speedily and easily as possible obtaining bread and milk.

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28
Q

select goods
are usually only purchased after the consumer has considered the:

A

=Price
=Quality
=and brand name vs. those of a competitor’s products
=Examples → clothing some jewelry.

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29
Q

specialty good

A

= Spend a lot of time before a decision to purchase
=wants to be certain the item is precisely what he/she wants
=car

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30
Q

services

A

=Intangible → be an individual service → e.g. hairdresser
or
=Form part of the overall product on offer → Checkers sixty60

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31
Q

The life cycle of a product

A

development
introduction
growth
maturity
decline

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32
Q

advantages/ benefits of the packaging of the product

A

=Helps to protect the product
=Helps to identify the manufacturer
=Gives the consumer valuable information
=Helps to target different segments of the target market

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33
Q

price policy

A

Described as the monetary value (Rand) of a product or service that the consumer is prepared to pay.

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34
Q

When the business decides on the price, the following should be considered:

A

-Will the consumer be prepared to pay the price charged?

-How does the price charged compare with different brands offered by competitors?

-The availability, quality and price -of substitute goods.

-How sensitive are consumers to a change in price?

-Stock levels

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35
Q

name the price strategies

A

market penetration pricing
leader pricing
promotional pricing
bulk discount
prestige pricing

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36
Q

Market penetration pricing

A

=Sell the product at a low price→ to attract new customers →
=increase → consumer is familiar → new product.

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37
Q

Leader pricing

A

Reduces the price of some products → to get customers to come to the shop.

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38
Q

Promotional pricing

A

Discounts offered for a special event→ Mother’s Day OR increasing the prices of red roses → just before Valentine’s Day.

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39
Q

Bulk discount

A

Selling large quantities of a certain product (lower cost per unit).

40
Q

Prestige pricing

A

Consumer snob association with a product → paying more for the product.

41
Q

place
name the was the manufacturer can get the product to the consumer:

A

= producer to consumer
=producer to retailer to consumer
=producer to wholesaler to retailer to consumer

42
Q

place
Retail outlet must pay special attention to:

A

Availability of parking (or public transport)

Location of the store in the shopping mall.

Displays in windows →to attract customers’ attention.

43
Q

The different options available to the manufacturer when it comes to retail shops selling their product?

A

intensively distributed
selectively distributed
exclusively distributed
franchising

44
Q

promotion policy
Principles to be kept in mind when developing a marketing communicating (promotion) strategy:

A

=Only products and services that meet set standards of quality
=An in-depth knowledge of the product’s
=A unique and memorable design
=Correct advertising medium
=Illegal to criticize competitor’s
=Expenses ( must be seen as an investment)

45
Q

Four elements to the marketing communication mix:

A

advertising
personal selling
sales promotion
publicity

46
Q

advertising

A

aimed at mass audiences
-the business has to pay to advertise
- it has to be repeated many times before the consumer really takes it seriously

47
Q

An advertising concept should be evaluated by reviewing the following:

A

-It is engaging?
-Is the advertisement credible?
-Does the advert create a lasting Impression?
-Does the advert prompt the consumer to take action?
-Does the advert promote all the features and benefits of the product?
-Is the advert part of a series of advertisements that comprises an advertising campaign?
-Branding: how well does the advert promote the key brand attributes?

48
Q

B - Personal selling

A

=Interaction between the buyer and the salesperson → salesperson shows a personal interest in the buyer.
=Because the employee is the face of the business, the business must make certain that there are sufficient control mechanisms in place, to ensure contact employees will protect and promote the brand and the reputation of the business.

49
Q

C - Sales Promotion

A

=Sampling of products
=Discount coupons
=Buy-one-get-one-free offers are examples of sales
=Instant appeal → the consumer to purchase.
=Too many sales promotions → consumer to question the quality

50
Q

D - Publicity

A

consumers trust publicity more than advertising

51
Q

internal publicity

A

The impression created by the appearance of the buildings, how and where products are displayed and the presence of the staff and the manner in which they talk to customers create a certain image of the business. This is known as internal publicity

52
Q

people

A

=people form part of the selling equation with the only exception being vending machines
=A business that sells/promotes a service that forms part of the product on offer
=The customer’s perception of the quality of service →may directly influence → his/her satisfaction & future purchase intentions.
=Employee is the face of the business → positive rewards or negative punishment → to ensure → will protect and promote the brand/the business.
=The quality of the after-sales service is vital to secure customer loyalty.

53
Q

what are the factors that may have a noticeable effect on the experience received by people

A

the attitude
behavior
skill?

54
Q

the physical evidence includes

A
  • stores representation
  • the appearance of the staff members
    tangible elements
    – business cards
    –brochures
    – letterheads
    –websites
55
Q

process

A

Refers to the operating systems and procedures that must be designed and managed to make the service experience as pleasant as possible for the customer.

56
Q

process may include:

A

=how quickly the customer is greeted
=time spent in queues
=helpfulness of staff members =when the customer has a query
=business follows up to evaluate customer satisfaction

57
Q

Step 5
Evaluate the effectiveness and take corrective measures.

A

=Once the marketing strategy has been implemented → important to evaluate and review the process to identify performance gaps
=The evaluation and review process → assist the business to achieve operational targets.
=Marketing activities are geared towards improving the overall business performance.

58
Q

key business functions include:

A

financial function -Makes funds available to run the marketing campaign.

production function- Manufactures products that will be advertised by the marketing function. This will generate profit that can be used to pay salaries and run the business.

human capital function- Employs and trains marketing staff.

purchasing department- Buys inventory, ensures the availability of the correct quality and quantity at the time that the production department needs material and the marketing campaign is committed to deliver.

59
Q

Issue that may have an impact or influences on marketing:

A
  • the consumer protection act
    -ethics in marketing
    -the buying decision model
    -branding
    -franchising as a form of marketing
60
Q

Impact of the Consumer Protection Act (CPA) on marketing aim to

A

safeguard the consumers’ right to receive a fair deal from businesses

61
Q

The consumers are given the following (7) rights in the Consumer Protection Act:

A
  1. the right to equity in the Market and Protection against Discriminatory Marketing Practices.
  2. the right to privacy
  3. The consumer has the right to choose
  4. The right to disclosure of information
  5. The right to fair and responsible marketing
  6. The right to fair and honest dealing
  7. The right to fair value, good quality, and safety.
62
Q
  1. the right to equity in the Market and Protection against Discriminatory Marketing Practices.

Suppliers are not allowed to:

A

give preferential treatment to any group of people → when marketing or selling their goods or services.

Setting the price for the goods or services based on → geographic location, socio-economic status, gender or race.

63
Q

the right to privacy

A

Consumers have the right to refuse unwanted direct marketing (via sms, telephone, email, letters)

The business may not continue to market the goods and services to the consumer if the consumer has indicated it is unwanted.

64
Q

The consumer has the right to choose:

A

A cooling-off period of five business days → if the transaction was not initiated by the consumer → result of direct marketing.

The CPA does not permit the automatic renewal of fixed-term contracts → Gym

Consumers have the right to request authorization before maintenance or additional repairs are carried out → will not be liable to pay.

Suppliers are not allowed to charge consumers for drawing up cost estimates or quotations.

The consumer has the right to return defective goods (within a reasonable time-frame) and request a full refund for these goods.

65
Q

The right to disclosure of information

A

The language in which contracts are written, should be appropriate for the group at which the contract is aimed.

Suppliers must display the prices of goods and services in full view of the consumer → where two prices are displayed → consumers have the right to demand paying the lower price.

66
Q

The right to fair and responsible marketing

A
  • a supplier may not be bait-marketing This means that suppliers may not advertise a product or service and then not have the advertised product or service available at the advertised price or quality or quantity
67
Q

The right to fair and honest dealing

A

Suppliers may not attempt to mislead or deceive the consumer when advertising products or services.

No supplier may use physical force OR unfair tactics when marketing goods or services OR collecting payment for goods or services.

Overbooking and overselling is not allowed by the CPA.

68
Q

The right to fair value, good quality, and safety

A

A consumer may return goods to suppliers within six months if the goods are of inferior quality, unsafe or defective. The supplier has to refund, repair or replace the unsafe or defective product.

A key principles of the Act is that there is an implied warranty of the quality and safety of the goods and services.

69
Q

Advertising Standards Authority of South Africa (ASA)

A

ensures businesses act in a legal and ethical manner when they advertise their products/services is reviewed.

70
Q

The Independent Broadcasting Authority Act (IBA) No 153 of 1993

A

gives the ASA legal recognition → right to develop and implement a Code of Advertising Practice with which all advertisers have to comply.

71
Q

The following is considered to be unethical:

A

=Materialism, where false needs are created, such as business advertising liquor to rehabilitated alcoholics.
=Giving products deceptive names,
=Selling second-hand goods as new goods.
=Any competitive advertising is illegal (and therefore unethical) in South Africa.
=Using unacceptable language, discriminating against the disabled or being racist.

72
Q

C) Factors influencing the buying decision:

A

=Philip Kotler 3 STEPS buyers behavior model.

73
Q

Philip Kotler 3 STEPS buyers behavior model states that

A

Buyer receives a stimulus:
a. 7 Ps of marketing.
b. Economic.
(an increase or decrease in disposable income)
c) Political (new legislation)
d) Technological (consumers
becoming aware of new products)

Buyer processes stimuli:
- Recognise problem (aware - desire.)
- Search for information (Friends)
- Evaluate different alternatives (healthy)
- Make a purchase decision
the product choice
brand choice
retailer choice
when to buy the product
how much he/ she will spend.

Post-purchase:
- Negative
- Neutral
- Positive

While going through the above phases, the consumer will be influenced by a number of factors, such as:
=Personal characteristics: Age, marital status, lifestyle.
=Psychological factors: Beliefs
=Social factors: Family, friends, colleagues, aspirational groups,
=Economic factors: Disposable income

74
Q

what is brand

A

it tells people WHAT is special about a particular business and WHAT sets it apart from their competitors.

75
Q

Value states

A

The value statement describes what the business represents and its core beliefs or philosophy.

When employees “live” or embody the “Brand” the consumers will hear the same message and they would regard the business as credible.

76
Q

The relationship between the name of the business or product and the trademark

A

1.) BRAND is the combination of the name and trademark.
2) Some businesses have a brand name and trademark for the business,
And
then separate brand names and trademarks for the different products,

77
Q

Forms of trademarks.

A

Manufacturer’s trademarks.
The same trademark (a common trademark) is used to market all products under this trademark, e.g., BMW – cars and bikes.

Individual trademarks.
Nestle manufactures a wide variety of products → is well known that some of these products come from Nestle → BUT some products are not commonly associated with the Nestle brand.

Retailer’s trademarks.
Pick & Pay’s “No Name Brand”

78
Q

Brand extension:

A

An existing brand is used to launch a new product in the same or a related market.

79
Q

Brand stretching:

A

Where an existing brand is used as a platform to launch a product into an unrelated market.

Virgin → started in music → stretching a brand successfully into →gyms & air transport.

80
Q

Advantages of a strong brand From the consumer’s perspective

A

Helps the consumer to identify the product (or service) on offer.

Feel safer or re-assured when buying a popular brand → quality/features → well-known.

Some brands →attraction of prestige or status → e.g. Levi jeans

81
Q

Advantages of a strong brand:
From the marketing perspective:

A

A successful brand will reduce marketing costs, as the product is already well known.

The business could probably charge more (a higher price)→ for a successful brand.

Easier to add new products to the range on a well-established brand name.

Brand preference → help the business to dominate → share of the market McDonald’s.

Trademark is registered → No other manufacturer may use it →protects the business from imitation products.

82
Q

When people hear a particular brand name, they associate it with certain impressions.These impressions can be described as follows:

A

=Impressions of the name.
=Logo.
=Image and marketing message of the business.

83
Q

Important factors critical to creating brand value I building a brand:

A

= consistency
= clear identity
=trust
=intimacy with customers
=distinctive voice

84
Q

Clear Identity:

A

The brand represents something unique to the customer.

85
Q

Trust

A

=The customer trusts what the business is saying based on past experience.
=The Brand must deliver what it represents.

86
Q

Consistency:

A

=Brand should remain consistent over a long time → through advertisements or through interaction with employees.
=The brand projects and reminds consumers what the business represents at every possible opportunity.

87
Q

Distinctive Voice:

A

Important to remember →Not only the external message that informs consumers what the brand stands for ALSO the internal marketing message → LIVE the brand.

88
Q

Intimacy with customers:

A

A strong relationship between the consumer and the brand.

89
Q

Franchising:

A

Franchising is a contract or agreement between the Franchisor (supplier / “parent company”) and the franchisee (distributor / individually-owned business). The franchisee agrees to distribute the product or service in line with certain pre-determined terms and conditions set out by the franchisor.

90
Q

Franchising from a marketing point of view:

A

The franchisor sells a business package in a particular area which is already successful.

The franchisee will then sell the product / service to consumers

This helps to increase the market awareness of the original product

91
Q

The formal business agreement between the franchisor and franchisee is known as the Franchise Agreement and allows for the payment of:

A

the original purchasing price of the franchise to the franchisor

royalties (between 5% - 10% of profits) paid to franchisor

a monthly advertising fee that the franchisor uses to do marketing / advertising on behalf of all franchisees.

92
Q

The franchisor must have a well-defined marketing strategy that will:

A

focused on the target market.

reminding the consumer about the brand.

give them a competitive advantage.

93
Q

Advantages of franchising from the point of view of the franchisor:

A

= The franchisor can expand the original business concept, without having to spend large amounts of capital.

= Good chance of success, because he/she will benefit from the proven success and advice of the franchisor.

=Easier to borrow capital from the bank → if the bank knows the money will be invested in a franchise (an already proven and successful concept).

94
Q

disadvantages of franchising from the franchisee’s point of view:

A

= The franchisor may find the continuous training and support of the franchisees difficult and demanding.

=The franchisee may find it frustrating and limiting to be bound by strict criteria stipulated ‘in the franchise agreement → no opportunity to design a unique marketing campaign → controlled by the franchisor.

=The franchisor does not provide the ongoing support that was promised to the franchisee.

95
Q

Franchising from a marketing point of view Characteristics

A

=Franchise is a marketing system, NOT a form of ownership!!!!
=Buys a franchise package
=Franchisee pays franchiser a fee or commission
=Franchiser offers assistance to franchisee

96
Q

franchise: Advantages

A

franchisor point of view
- can expand quickly
- limiting staff problems

franchisee point of view
- advice from the franchisor
-legal protection
-easier to raise capital
-bulk buying

97
Q
A

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