Marketing Flashcards
Sampling
Sample is picked
at random e.g.
using a telephone
directory, list of
customers or
electoral register
ADvantages
No chance of bias being
introduced when selecting
individuals for the sample
Saves time in selecting a
sample
Disadvantages
Sample may not reflect the
target market
Can over represent a certain
segment (eg all males could be
chosen at random)
quota sampling
The researcher
chooses from a
group of people
with certain
characteristics
advantages
Can select customers that
reflect the target market
disadvantages
The exact sample from each
group is not randomised, so
researcher bias could be
involved
Time consuming to find people
who reflect the target market
Customers
Aiming their products towards a
particular target market –
differentiated marketing
Aiming their products towards more
than one target market –
undifferentiated marketing
Market lead
Product produced based on
what customer wants
Customer’s needs and wants
identified through market
research
Changes in social factors
(trends/fashions) can be
identified and acted upon
more easily
Lots of competition
product lead
Little or no competition
Little or no market
research and customers
wants not of importance
Product is produced
because the organisation
think they are good at
providing it
3 methods of field research
telephone survey
market researcher phones customers to ask questions
information is obtained. immidiatly and can be clarified if necesary however only short surveys can be carried out
Personal interview
street survey cold calling t home to ask questions.
allows two way communication
it can take a lot of time to conduct the interviews
hall tests
product is given to someone to try - feedback is gathered inexpensive and easy to do however customers feeling and opinions can be difficult to analyse
Product life cycle
- Research and Development
Product is being researched and developed.
Prototypes will be made and tested.
Impact on sales – no sales made yet.
Impact on profits – product will be making a loss due to costs
of development and no income. - Introduction
Product is launched.
Introductory activities will be used to create a ‘hype’.
Impact on sales – sales are slow as customers are unsure.
Impact on profits – high promotional costs will mean product
is still making a loss.
- Growth
Customers are fully aware and starting to buy the product.
Impact on sales – sales start to rise rapidly.
Impact on profits – profits are starting to be made and
increasing after the initial investment of promotions.
- Maturity
Product been on the market for some time.
Competition now enters the market.
Impact on sales – sales peak and level out.
Impact on profits – profits are healthy (at their peak) but
competition will affect and the profits will begin to fall.
- Saturation
Product suffers from too many competitors being in the
market.
Impact on sales – sales begin to fall as customers go to
competitors.
Impact on profits – profits fall rapidly (this could be as
prices are cut to encourage sales).
- Decline
Product’s life is nearing the end – will eventually be
withdrawn from the market.
Impact on sales – sales fall rapidly.
Impact on profits – profits continue to fall, eventually
products may be sold at unit cost in order to break even.
profit are falling rapidly
decline = Product’s life is nearing the end – will eventually be
withdrawn from the market.
sales are falling rapidly
profits continue to fall, eventually
products may be sold at unit cost in order to break even.
Extention strategies
Lowering price e.g. sale
Reducing the price will make it affordable – this will appeal
to more market segments.
different advertising or sales promotion techniques can prolong the life of the product, giving it a new image.
Changing place its sold
e.g. online
Making a product more available means it will be seen by
more potential customers – e-commerce means it can be sold
worldwide.
Develop variations
Developing new varieties/flavours means it can appeal to the
different tastes of different markets.
Change the packaging
Rebranding the packaging can make it appeal to new market
segments.
product portfolio
Product Portfolio
Most businesses will have a range of products to
spread the risk of one product failing.
In addition a wide range of products can:
Meet the needs of different market
segments
Appeals to different market segments
Increase profits
Increase the status and reputation of
the firm
diverse product portfolio
Having products for sale across completely
different market segments.
This spread risks in case one fails ☺
Example:
Virgin:
Virgin Atlantic
Virgin Banks
Virgin TV
Virgin Trains
disadvanntages of branding
If a problem occurs with one specific product this can
damage the full brands reputation
Time consuming to establish – impact on business profits
Some people try to copy brands (fakes) – business will
need to spend time ensuring this does not affect their
reputation.
adv and dis boston matrix
Advantages
Spread risk over different
markets
Newer products replace those at
end of their life cycle
Businesses find it easier to
launch new products
can encourage customer loyalty as customers are more likely to buy multiple products from the same brand
disadvantages
High costs to research and
develop new products
High marketing costs to promote
SO MANY products
Bad publicity for one product
may affect the whole portfolio
pricing strategys
A low price is set to
try and undercut the
competition. this means that customers will think they are saving money compared to other competitors.
high price
A high price is set to
try and increase brand
image and because the
business is confident
consumers will pay it.
market pricing
Setting price at a
similar price to
competitors.
Homogeneous product
means that price
competition is not of
benefit.
They compete in other
areas – service etc.
psychological pricing
Involves setting a
price that makes
customers think the
product is cheaper
than it actually is.
E.g. 99p rather than
£1.00
DIscrinimation pricing
Businesses sometimes charge
different prices in different
locations, for example airports
and train stations, or at
different times of the year.
cost plus
A percentage of the
cost is added to give a
profit.
For example, if
ingredients cost £1 and
the mark up is 50%
then the selling price
will be £1.50
price skimming
Charging a high price at
launch, which eventually
comes down. 3D TVs is a
good example.
penetration pricing
Setting a low price for a
new product to encourage
people to purchase.
destroyer pricing
Setting a very low
price to destroy the
competition. Product
probably being sold at
a loss, however once
competition is
destroyed the price
will return to market
price. this is illegal
demand orientated pricing
Prices vary with the
product (for example, the
cost of tea may rise when
the harvest is poor).
Or fuel prices rise due to
scarcity.
loss leader
Loss Leader is when a business puts
the price so low it makes a loss
(lower than the cost to make). This is
to entice customers into the store or
to purchase more expensive add ons
in the future.
branding disadvantages
If a problem occurs with one specific product this can
damage the full brands reputation
Time consuming to establish – impact on business profits
Some people try to copy brands (fakes) – business will
need to spend time ensuring this does not affect their
reputation.
retailing trends
Out of town (OOT) shopping centres – now
found on the outskirts of most major towns as
they have good infrastructure and free car
parking
Hypermarkets and Superstores – these sell
many goods and services all under the one roof
(sell petrol, pharmacy, post office)
Convenience supermarkets – changing work
patterns and lifestyle changes, growth of
smaller supermarkets in convenient locations
Online retailers – rather than setting up their
own e-commerce site, some manufacturers will
sell through sites such as Amazon (dubbed
e-tailer – the largest online retailer)
