Marketing Flashcards
What is field research
this is research carried out, first hand, by the firm for their own purposes, for example a postal survey or a street survey.
Desk research
this is research that has already been carried out by another firm and is often published, eg a sales report, newspaper or a government report.
4 types of field research
Street surveys, postal surveys telephone surveys, hall test.
What re the advantages and disadvantages of a street survey
Advantages
Cheap to undertake
• Responses can be clarified
• Can select your respondent by visual means eg their gender, age, lifestyle
Disadvantages
• Response rates are low
• Interviewers have to be trained which costs
• Subject to interviewer bias
Advantages and disadvantages of postal survey
Advantages
• Wide area is covered
• Cheap to undertake
• Can target a certain location eg new housing estate
Disadvantages
• No guarantee the responsdent has filled in survey
• Response rates are very low
Advantages and disadvantages of telephone survey
Advantages
• Responses are immediate
• Wide geographical area is covered
• Cheaper to carry out
• Can be undertaken by computers for the first call
• Questions can be clarified
Disadvantages
• Customers see it as an intrusion and so responses are very low
Advantages and disadvantages of a hall test
Advantages
• Instant reactions to products can be gathered
• Consumers can be targeted eg young mums in a supermarket
• Relatively cheap to undertake
Disadvantages
• Only a small sample is accessed which may not reflect the views of the market
• Can be difficult to analyse qualitative information
Advantages and disadvantages of desk research
Advantages
• There is a wide range of sources to access so decisions should be more informed
• The information is often cheap to collect so costs will be low
• Competitors’ information is available to access so the firm has a fuller understanding of the whole market
• Saves the firm alot of time carrying out the research if the information has already been collected which frees up time for analysis of the data
Disadvantages
• As competitors get access the information is not unique
• The information is often out-of-date
• It can be difficult to test the accuracy fo the information
• The information may contain bias such as an one-sided political opinion and so is misleading
What is the order of the product development
Idea generation, idea screening, develop a prototype, test marketing, commercialisation.
Explain the stages of the product development
Idea Generation:This is where the firm gathers ideas about new products. Sources of new ideas will come from….Market research surveys; comments on blogs; customer suggestions; staff suggestions; competitors; R&D labs
Idea screening
Potential new products are then screened by the firm to see if they will be viable. This means, will the new products generate enough sales, profits? Also, will the product fit with the company’s image and can the firm easily manufacture the product? The firm also has to do calculations on what it will cost.
Many products will be eliminated at this stage.
Develop prototype
The firm will then develop a prototype of the product which will confirm if the product is of a workable idea. The image here is of a mock car which the firm can then carry out tests on to check that the product is technically viable and safe for consumers to drive it.
Test Marketing
Once the firm has selected the best product to fit their needs they will test market the product before launching the product to the whole market. A firm will launch the product in to a small geographical area that matches the profile of their typical customer. They will sell the product in a few key shops such as Tesco and monitor closely the results. The firm will be looking for the customers’ response to the product, any potential problems and they will gauge the effectiveness of their advertising.
For instance, Golden Wonder carried out a test marketing campaign in Carlisle. The firm will look at its feedback from the test marketing and carry out several alterations to their original idea before launching the product to the whole market.
Commercialisation
This is a fancy word that means, the firm will then launch the product to the whole market. The timing is very important. Samsung’s Galaxy Gear will not be launched at the same time as the PS4, for instance. The firm will support the launch the product with a large advertising campaign which will cost thousands of pounds.
What are the stages in the product life cycle
I = Introductory Stage
The product has just been launched and sales will be very low. Profits are, also, low as the firm has to cover high advertising and R&D costs.
G = Growth Stage
Customers begin to return for repeat purchases and sales start to rise at this stage. Profits, also, rise as firms expand output and begin to lower costs with bulk buying discounts.
M= Maturity Stage
Sales peak at this stage and there are many competitors in the market. There is little room for growth. Profits are at their highest in this stage as the firm is producing a large amount of goods and selling to a large customer base and so discounts on output are possible at this stage.
Many firms will have sales promotions (Buy one get one free – Bogof) at this stage to encourage sales away from the competition. An example of a sales promotion is a competition ran by McDonalds on the side of their packaging.
S = Saturation stage
This stage is where the market is full of competitors and there is no room for market growth. The only way to increase sales is to steal them from competitors. Sales can dip slightly. Firms can decide at this stage whether to continue with the product and invest in some extension strategies such as a new ad campaign. Or to let the product fall out of the market, some say to wither on the vine.
D = Decline Stage
The product may go out of fashion or become obsolete and so sales will eventually fall, hence the decline stage. Firms will not invest in advertising or new packaging to revive the sales of the product and will instead allow the product to be removed from the market. Examples are, Radion soap powder or Red Mountain coffee.
Extension Strategies
Many brands that are around now were invented many years ago. They have continued to be popular with customers due to the firm continually changing small areas of the product to keep it up-to-date with the new trends.
Name and explain the pricing techniques
Skimming price
This price is used for a new product, which is priced at a HIGH level when launched and after a period of time it is lowered in value
New iPad, new cars, latest PlayStation
Penetration pricing
This price is used for a new product, which is priced at a LOW level when launched and after a period of time it is raised in value
New soap powders, new shampoos
Promotional pricing
This is when products are priced at a LOW level for a short period of time to max sales or clear unsold stock
Buy one get one free, competitions,
Premium pricing
This is where products are priced at a high value to give an impression of quality
Gucci, Prada, Jaguar car
Competitive pricing
This is when products are priced at the SAME level as the competition and other factors are used to attract customers eg packaging
Petrol is often priced the same between garages with only 1 or 2p making up the difference
Discrimination pricing
This is when a price for the SAME product is charged at a different rate depending on the time of day or age of the customer.
An off peak rate for telephone calls and train tickets
Loss Leaders
This is where the firm will lower the price of a product, often below the cost to make the product, in order to attract customers into the store where they will buy more expensive products.
