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A Level Business > Marketing > Flashcards

Marketing Flashcards

1
Q

+
5 advantages of mass marketing

A

large scale production

high revenue

barriers to entry (how to get product to market)

research and development

brand awareness

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2
Q

5 disadvantages of mass marketing

A

fixed capital

changes in demand

effects of standardisations (lower prices)

competition

adding value

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3
Q

why do we need to differentiate mass marketing?

A

to increase sales volume and charge higher prices.

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4
Q

5 ways you can differentiate mass marketing?

A

design
branding
packaging
clear promotion techniques
different distribution methods

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5
Q

what types of marketing can targeting include

A

niche and mass marketing

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6
Q

define niche marketing

A

when a firm targets a small subsection or previously unexploited gap in a larger market (may give a business first movers advantage)

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7
Q

what is a silo mentality

A

a way of thinking that is rigid and simplistic, its a reluctance to share info with employees of different divisions in the same company

(struggle to see beyond established ways of doing things, reducing the organisations efficiency an contributing to a damaged corporation culture)

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8
Q

what are 4 internal influences on marketing objectives

A

finance
HR
operational issues
corporate objectives

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9
Q

what does internal influence finance consist of?

A

marketing budget

cash flow targets (timing and quantity of sales)

return on investments

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10
Q

what does internal influence HR consist of?

A

Will marketing activities lead to more customers?

Are staff trained to respond to marketing activities?

Keeping staff informed

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11
Q

what does internal influence operational issues consist of?

A

Ability to meet demand

Implementation of marketing decisions (Ability to physically produce a new or changed product)

Logistics of a new market (Distribution and stock issues)

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12
Q

what does internal influence corporate objectives consist of?

A

Always the driving force behind other functional objectives

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13
Q

define capacity utilisation

A

the percentage of total capacity that is actually being achieved in a given period actual output/optimal output

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14
Q

what are 4 external influences on marketing objectives

A

competitors actions
market factors
technological change
ethical and environmental influences

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15
Q

what does external influence competitors actions consist of?

A

Marketing budget
Promotional activities
Pricing policies
Product development
Aggressive marketing

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16
Q

what does external influence market factors consist of?

A

Degree and relative power of competitors
Social factors
Legislation
Demographics

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17
Q

what does external influence technological change consist of?

A

E commerce
Digital marketing
Social media
Global markets
Production capabilities

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18
Q

what does external influence ethical and environmental influences consist of?

A

Consumers’ expectations
Pressure groups

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19
Q

define positioning

A

Where a product is placed in the market relative to its competitors

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20
Q

how can positioning be achieved

A

by changing elements of marketing mix to meet the needs of the target market.

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21
Q

factors of positioning

A

Attributes and benefits of the product
Competition
Product user
Pricing
Product use or application

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22
Q

influences on positioning

A

Internal constraints e.g. budgets
Internal strengths e.g. creativity and innovation
Market conditions e.g. degree of competition
External environment e.g. state of the economy

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23
Q

define market research

A

The collection, analysis and communication of information to assist decision making in marketing and the systematic gathering and analysis of data about problems relating to the marketing of goods and services

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24
Q

the 7 purposes of market research

A

Gain an understanding of the market

Identify changes in the market

Improve awareness of the market

Understand customer needs

Reduce risk and uncertainty

Forecast market trends

Basis on which to base marketing decisions

Support planning

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25
Q

business’ need to be accurate and up to date with their information. 4 changes they should look out for

A

changes in technology
changes in consumer taste
changes in the product ranges of competitors
changes in economic conditions

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26
Q

what are the 7 O’s

A

Occupants – who is the market?
Object – what do they buy?
Objectives – why do they buy?
Organisations – who influences buying decisions?
Operations – how do they buy?
Occasions – when do they buy?
Outlets – where do they buy?

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27
Q

define primary research

A

involves the collection of first hand data that did not exist before and therefore it is original data
eg. surveys, questionnaires, observations, focus groups

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28
Q

define secondary research

A

research that has already been undertaken by another organisation and therefore already exists
eg.National and Local Government e.g. Office for National Statistics, Market Research organisations e.g. MORI, MINTEL, Professional bodies e.g. ACCA, Trade unions and Confederation of British Industry (CBI), internet, newspaper, magazines

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29
Q

how is research conducted

A

asking simple questions
warm environment
how reliable? (group thinking)
potential issues (could be bias)

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30
Q

define quantative research

A

the gathering of statistical data to inform the company about people’s behaviour but does not identify the reasons – e.g. through sales records

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31
Q

define qualitative research

A

the gathering of non-statistical information that gives a company in depth insight into the reasons for human behaviour – e.g. through focus groups

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32
Q

3 sampling techniques

A

random
quota
stratified

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33
Q

define marketing data

A

any information gathered and analyse to help predict trends and sales to aid decision making

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34
Q

define extrapolation

A

uses trends established from historical data to forecast the future

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35
Q

define correlation

A

the strength of the relationship between two variables

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36
Q

define independent variable

A

the factor that causes the dependent variable to change (normally on x-axis)

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37
Q

define dependent variable

A

influenced by the independent variable (normally on y axis)

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38
Q

positive correlation

A

the independent variable increases in value so does the dependent variable

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39
Q

negative correlation

A

the independent variable increases in value the dependent variable falls in value

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40
Q

no correlation

A

no discernible relationship between the independent and dependent variable

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41
Q

strong correlation

A

there is little room between the point and the line

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42
Q

what could strong correlation be used for

A

used to make marketing stratergies

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43
Q

weak correlation

A

data points are spread quite wide and far away from line of best fit

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44
Q

what does a confidence interval do

A

gives percentage probability then an estimated of possible values (includes the actual value being estimated)

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45
Q

2 things confidence interval is useful for

A

helps evaluate the reliability of particular estimate

businesses need to know how confident they should be in their estimates

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46
Q

4 examples of confidence intervals

A

quality management

market research

risk management & contingency planning

budgeting & forecasting

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47
Q

how confidence intervals are used in quality management

A

percentage reliability of machines
the chance that quality control samples will detect issues

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48
Q

how confidence intervals are used in market research

A

statistical estimates for sales forecasting
reliability of data from customer surveys

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49
Q

how confidence intervals are used in risk management & contingency planning

A

risks of sakes forecasts not be achieved
scenario planning for competitor actions

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50
Q

how confidence intervals are used in budgeting & forecasting

A

likely range of revenue and costs based on key assumptions
sales forecast to support new product launches

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51
Q

5 examples of why technology should be valued

A

gather + analyses large volume of data quickly and accurately (eg. cookies, browser history)

track and interpret consumer spending habits

collect consumer opinions from around the world

encourage consumer feedback through social media and review sites

enables two way communication

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52
Q

define big data

A

the process of collecting and analysing large data sets from traditional and digital sources to identify trends and patterns that can be used in decision marketing

(large data sets can be both structured (sale transaction) and unstructured (posts on social media))

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53
Q

define elasticity

A

measures the responsiveness of demand to a change in a relevant variable ,such as price or income

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54
Q

define price elasticity of demand

A

measures the extent to which the quantity of the product demand is affected by a change in price

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55
Q

what is the first law of price demand

A

as price increases less quantity is demanded (price quantity graph is always negative)

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56
Q

define price elastic

A

customers are more responsive to change in an increase in price

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57
Q

define price inelastic

A

customers are less responsive to change in an increase in price

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58
Q

define unitary price elasticity

A

change in demand is the same response as the change in price

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59
Q

price elastic PED value

A

more than -1, change in demand is more than change in price

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60
Q

price inelastic PED value

A

less than -1, change in demand is less than change in price

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61
Q

unitary price elasticity PED value

A

change is demand = change in price

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62
Q

PED equation

A

% change in quantity demanded / % change in price

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63
Q

change in price % equation

A

(difference / original) x 100

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64
Q

change in demand % equation

A

(new unit / original unit) x 100

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65
Q

what happens to price elastic and inelastic demand if you raise selling price

A

elastic - revenue will decrease
inelastic - sales revenue will increase

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66
Q

what happens to price elastic and inelastic demand if you lower selling price

A

elastic - sales revenue will increase
inelastic - sales revenue will decrease

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67
Q

Factors influencing PED

A

Brand strength
Necessity
Habit
Availability of substitutes
Time

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68
Q

Effect of Brand strength on PED

A

Products with strong brand loyalty and reputation tend be price inelastic

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69
Q

Effect of necessity on PED

A

The more necessary a product, the more demand tends to be inelastic

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70
Q

Effect of Habit on PED

A

Products that are demanded and consumed as a matter of habit tend to be price inelastic

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71
Q

Effect of Availability of substitutes on PED

A

Demand for products that have lots of alternatives (substitutes) tends to be price elastic

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72
Q

Effect of of time on PED

A

In the short-run, price changes tend to have less impact on demand than over longer periods

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73
Q

Problems of forecasting price elasticity of demand

A

The price elasticity of demand for a product is constantly changing in a dynamic world

It is very difficult for firms to measure

competitors are continually improving existing products

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74
Q

why is it very difficult for firms to measure PED predictions (forecasting)

A

Difficulty in finding accurate information

Price elasticity changes over different price ranges

Price elasticity will change over the period of the economic cycle

Tastes and fashions are constantly changing

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75
Q

Define income elasticity of demand

A

measures the extent to which the quantity of a product demanded is affected by a change in income

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76
Q

Calculating Income Elasticity of Demand - Formula

A

% change in quantity demanded / change in income

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77
Q

how to determine if product/service is necessity or luxury

A

0-1 inelastic (necessity)
1+ elastic (luxury goods)

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78
Q

limitations of using elasticities

A

might not be reliable

consumer taste may change

rapid technology change (previous data makes it less reliable)

competitors will react

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79
Q

what is a good strategy for making demand more price elastic

A

Building strong brands and product USP
(if product priced incorrectly demand could fall)

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80
Q

What is the Boston Matrix

A

The Boston Matrix is a model which helps businesses analyse their portfolio of businesses and brands.

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81
Q

What is the marketing mix

A

The marketing mix is the combination of elements through which a firm achieves its marketing objectives

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82
Q

What are the 7p’s of marketing

A

product
price
place
promotion
physical environment
process
people

83
Q

what are convenience products

A

key priority, daily items e.g bread

84
Q

what are shopping products

A

customer doesn’t rush to purchase, compares strength and weaknesses (depends on impulsiveness, emotional and physical environment) eg for clothes, deliveroo

85
Q

what are specialty products

A

customers spend time thinking doing research before buying eg. luxuries, designer

86
Q

define product portfolio analysis

A

looks at the range and brands that a firm has under its control

87
Q

what are the four names in the boston matrix

A

cash cow, dog, problem child, rising stars

88
Q

what market share and market growth is a cash cow

A

high S low G

89
Q

what market share and market growth is a dog

A

low S low G

90
Q

what market share and market growth is a rising star

A

high S high G

91
Q

what market share and market growth is a problem child

A

low S high G

92
Q

what is a cash cow

A

established products

The profits made through these products can be used to finance other products such as rising stars

Firms will want to establish as many cash cows as possible.

With low market growth there is likely to be less competition from new firms entering the market, therefore firms can spend less on advertising

93
Q

what is a dog

A

likely to be discontinued

can be profitable but not enough to be kept on

company likely to focus on cash cows and rising stars

94
Q

what is a rising star

A

enjoy increasing sales revenue

large competition between these firms as they might have similar new products

heavy promotional spending and increased capital investment in order to increase capacity

Cash flow can often be negative at first

funded from cash cows

hope they become a cash cow but many stars eventually become dogs

95
Q

what is a problem child

A

if there is enough demand can be very successful

if unsuccessful product may be discontinued

require a lot of attention, particularly in the form of marketing

cost the firm time and money

can be turned into a cash cow

96
Q

define market growth

A

potential to grow

97
Q

define market share

A

how much the company makes compared to competitors

98
Q

define product for service

A

anything that is capable of satisfying consumer needs

99
Q

define physical products

A

have a tangible presence e.g trainers, game console, take away, makeup

100
Q

define services

A

are intangible eg dental treatment, accounting services, insurance, holidays, music downloads

101
Q

define tangibles

A

can be physically touched

102
Q

define product life cycle

A

a technique used to track the stages aproduct goes through during its life​

It tracks sales over time from the development stage of aproduct through launch and until it is removed from themarket​

eg the revenue from a product that has reachedmaturity could be used to help develop a new product

103
Q

6 stages in a product life cycle

A

development
introduction
growth
maturity
decline
extension strategies

104
Q

what is development in product life cycle

A

negative cash flow due to market research and Research and Development (R&D)

No sales revenue before launch​

105
Q

what is introduction in product life cycle

A

production and promotion costs can be high​

106
Q

what is growth in product life cycle

A

sales revenue increases but as more units are sold production costs also increase. However, there will be economies of scale​

107
Q

what is maturity in product life cycle

A

sales stabilise and the product acts as a cash cow​

108
Q

what is decline in product life cycle

A

at some point the product will start to lose sales

109
Q

what is Extension strategies in product life cycle

A

many products are adapted and given a new lease of life​

110
Q

define price

A

money charged for a product or service

Everything that a customer has to give up in order to acquire a product or service

111
Q

define pricing methods

A

The method used to calculate the actual price set

112
Q

define pricing strategies

A

medium to long term to achieve marketing objectives

Have a significant impact on marketing strategy

113
Q

define pricing tactics

A

short term, something you think of on the spot

114
Q

7 stages of price setting

A

Develop pricing objectives

Assessment of target market’s ability to purchase

Determine demand for product

Analyse demand, cost and profit relationship

Evaluate competitors’ prices

Select pricing strategy & tactics

Decide on price

115
Q

2 business objectives that’ll affect pricing

A

financial, marketing

116
Q

5 financial influences on pricing

A

Maximise profit

Achieve a target level of profits

Achieve a target rate of return

Maximise sales revenue

Improve cash flow

117
Q

4 marketing influences on pricing

A

Maintain/improve market share

Beat/prevent competition

Increase sales

Build a brand

118
Q

main factors that influence pricing

A

Costs

Elasticity of Demand

Product Life Cycle

Market Share

Marketing Objectives

Positioning

Competitors

119
Q

4 competitor influence on pricing

A

price leaders
price takers
price makers
price followers

120
Q

what is a price taker

A

Have no option but to charge the ruling market price

121
Q

what is a price maker

A

Able to fix their own price

122
Q

what is a price leader

A

Market leaders whose price changes are followed by rivals

123
Q

what is a price follower

A

Follow the price-changing lead of the market leader

124
Q

name an important influence on pricing

A

cost as over time a price must be more than the related costs in order to make a profit

125
Q

method of cost-based pricing is called

A

a mark up

126
Q

benefits of Using Cost to Influence Pricing

A

Easy to calculate

Price increases can be justified when costs rise

Managers can be confident each product is being sold at a profit

127
Q

Drawbacks of Using Cost to Influence Pricing

A

Ignores price elasticity of demand

May not take account of competition

Profit is lost if price is set below the that customers are prepared to pay

Sales are lost if price is set above the price customers are willing to pay

Business has less incentive to control costs

128
Q

what is price skimming

A

Set a high price to maximise profit to achieve quick recovery of development costs then can cut price down

129
Q

what is price penetration

A

Offer a product at a low introductory price to
Gain market share quickly, Build customer usage and loyalty, Price can be increased once target market share is reached

bait and hook approach

130
Q

define dynamic pricing

A

Dynamic pricing is a pricing strategy in which businesses set flexible prices for products or services based on current market demands

131
Q

what is the main objective of distribution

A

To make products available in the right place at the right time in the right quantities

132
Q

define a distribution channel

A

A distribution channel moves a product through the stages from production to final consumption

133
Q

what is each party in a distribution channel called

A

intermediary

133
Q

how many main distribution channels are there

A

3

direct 1 has 2 stages
2 has 3 stages
3 has 4 stages

133
Q

stages of main distribution channel 1 (direct)

A

producer to consume

133
Q

stages of main distribution channel 2

A

producer to distributor/agents to consumer

133
Q

stages of main distribution channel 3

A

producer to wholesaler to retailer to consumer

134
Q

7 purposes of distribution channels

A

Provide a link between production and consumption

Help gather market information

Communicate promotional offers

Find and communicate with prospective buyers

Physical distribution - transporting and storing

Financing – other parties finance the stock

Risk taking – other parties take some risk

135
Q

what are the 4 Main Types of Intermediary

A

agents
wholesalers
retailers
distributors

136
Q

what are retailers main focus

A

consumer markets as they deal with consumers directly

137
Q

what are the 6 kinds of retailers

A

Multiples – chains of shops owned by a single company (e.g. Sainsbury’s or Next)

Specialist chains (e.g. fast fashion, perfume)

Department stores (e.g. Debenhams, John Lewis)

Convenience stores (e.g. Spar, Costcutter)

Independents – a shop run by an owner

Franchises (retail format operated by franchisee)

138
Q

6 key advantages of retail distribution

A

Convenience for customers

Often UK-wide reach to customers

Retailer chooses the final price

Retailer handles the financial transaction

Retailer holds the stock

After-sales support (e.g. returns)

139
Q

why are wholesalers ‘break bulkers’

A

they buy in large quantities from producers and break them into smaller quantities to sell to retailers

140
Q

advantages of wholesalers

A

reduce the producers transport cost (fewer journeys)

retailers can or n smaller amounts

141
Q

how do retailers make money

A

by buying at a lower price from the producer and adding a profit margin onto the price paid by the retailer

142
Q

difference between agents and distributors

A

distributors hold stock

143
Q

what are agents

A

specialised type of distributors who dont hold stock

they earn commission based on sales achieved

144
Q

what do distributors do

A

sell products and services as a local sales point

they normally specialise in an industry eg building supplies, electrical components, industrial clothing

145
Q

what tertiary sector do agents work in

A

travel
insurance
publishing

146
Q

how to decide which channel to use (5 factors)

A

Channel length - direct or indirect?

Choice of intermediary

Use just one or several channels?

How to move the goods through the channel?

Control over the channel – e.g. who decides price, promotion, packaging?

147
Q

what is a direct distribution

A

Channel where a producer and consumer deal directly with each other without the involvement of an intermediary

148
Q

what is an indirect distribution

A

Involves the use of intermediaries between the producer and consumer

149
Q

3 methods in direct channel

A

direct mailing
e-commerce
telemarketing

150
Q

5 reasons to use indirect distribution channels

A

Geography- customers may live too far away to be reached directly or spread widely

Consolidation of small orders into large ones

Better use of resources elsewhere

Lack of retailing expertise

Segmentation - different segments of the markets can be best reached by different distribution channels

151
Q

3 factors to consider when choosing a distribution channel

A

1 Nature of the product eg.
Perishable/fragile?
Technical/complex?
Customised
Type of product – e.g. convenience, shopping, speciality
Desired image for the product

2 The market
Is it geographically spread?
The extent and nature of the competition

3 The business
Its size
Its nature
Does it have established distribution network?

152
Q

define multi-channel distribution

A

a business using more than one type of distribution channel

153
Q

3 benefits of using multi-channel distribution

A

Allows more target market segments to be reached

Customers increasingly expect products to be available via more than one channel

Enables higher revenues – e.g. if retail outlets have no stock, but customer can buy online

154
Q

3 benefits of using multi-channel distribution

A

Potential for channel “conflict” –e.g. competing with retailers by also selling direct

Can be complex to manage

Danger that pricing strategy becomes confused (in the eyes of customers)

155
Q

define omni-channel distribution

A

an approach to sales that focus on providing seamless customer experience whether the clientisshopping online from a mobile device, a laptop or in a brick-and-mortar store.

156
Q

main 4 uses of promotion

A

increase sales
attract new customers
encourage customer loyalty
launch new product

157
Q

main aim of promotion

A

to ensure that customers are aware of the existence and positioning of products and to persuade customers that the product is better than competing products and to remind customers about why they may want to buy

158
Q

5 Key Factors Influencing Promotional Decisions & Strategy

A

Stage in the product’s life cycle
Nature of the product
competition
Marketing objectives & budget
Target market

159
Q

what is meant by stage in the products life cycle

A

Position in the life cycle will require different promotional methods

160
Q

what is meant by nature of product

A

What information do customers require before they buy?

161
Q

what is meant by competition

A

What are rivals doing ?
What promotional methods are traditionally effective in a market?

162
Q

what is meant by market objectives and budget

A

What does promotion need to achieve?
How much can the firm afford?

163
Q

what is meant by target market

A

Appropriate ways to reach the target market segments

164
Q

what are the 2 types of promotion

A

above the line

below the line

165
Q

what is meant by above the line promotion

A

This is paid for communication in the independent media e.g. advertising on TV or in the newspapers. Though it can be targeted, it can also be seen by anyone outside the target audience.

166
Q

what is meant by below the line promotion

A

This concerns promotional activities where the business has direct control over the target or intended audience.

167
Q

4 types of advertising

A

paid for communication
media
consumer messages
mass market

168
Q

a disadvantage of mass market advertising

A

VERY expensive

168
Q

different type of media advertising

A

TV & radio, newspapers & magazines, online, social media, cinema, billboards

169
Q

what is a brand

A

a product with unique character, for instance in design or image. It is consistent and well recognised

170
Q

personal selling

A
171
Q

7 advantages of personal selling

A

High customer attention

Message is customised

Interactivity

Persuasive impact

Potential for development of relationship

Adaptable

Opportunity to close the sale

172
Q

4 disadvantages of personal selling

A

High cost

Labour intensive

Expensive

Can only reach a limited number of customers

173
Q

what is sales promotion

A

a tactical strategy designed to stimulate purchases, Short term incentives to increase sales

174
Q

6 examples of sales promotion

A

coupons
money off
free samples
loyalty points
free gifts
buy one get one free deals

175
Q

2 advantages of sales promotion

A

Effective at achieving a quick boost to sales

Encourages customers to trial a product or switch brands

176
Q

3 disadvantages of sales promotion

A

Sales effect may only be short-term

Customers may come to expect or anticipate further promotions

May damage brand image

177
Q

define direct marketing

A

Promotional material directed through mail, email, social media or phone to individuals or businesses

178
Q

why use direct marketing

A

Allows a business to generate a specific response from targeted groups of customers

allows a business to focus on several marketing objectives 9such as: increasing sales to existing customers , building customer loyalty, re-establishing lapsed customer relationships, generating new business

179
Q

5 advantages of direct marketing

A

Focus limited resources on targeted promotion

Can personalise the marketing message

Relatively easy to measure response & success

Easy to test different marketing messages

Cost-effective if customer database is well managed

180
Q

3 disadvantages of direct marketing

A

Response rates vary enormously

Negative image of junk mail and email spam

Databases expensive to maintain and keep accurate

181
Q

what is PR (public relations)

A

create goodwill toward an individual, business, cause or product

182
Q

3 main aims of PR

A

To achieve favourable publicity about the business

To build the image and reputation of the business and its products, particularly amongst customers

To communicate effectively with customers and other stakeholders

183
Q

6 jobs PR do

A

Promoting new products

Enhancing public awareness

Projecting a business image

Promote social responsibility

Projecting business as a good employer

Obtain favourable product reviews / recommendations

184
Q

define sponsorship

A

a payment for an event, person, organisation is given in return some consideration of benefit

(normally happens for sports)

(both sides benefit from sponsorship)

185
Q

what are the traditional 4P’s

A

product
price
promotion
place

186
Q

what are the 7P’s

A

product
price
promotion
place
people
process
physical environment

187
Q

define price (from 7P’s)

A

How much the customer pays for the product

188
Q

define product (from 7P’s)

A

The product or service that the customer buys

189
Q

define promotion (from 7P’s)

A

How the customer is found & persuaded to buy

190
Q

define place (from 7P’s)

A

How the product is distributed to the customer

191
Q

define people (from 7P’s)

A

The people who make contact with customers in delivering the product

192
Q

define process (from 7P’s)

A

The systems and processes that deliver a product to a customer

193
Q

define physical environment (from 7P’s)

A

The elements of the physical environment the customer experiences

194
Q

3 key implications of extended marketing mix

A

Each of the business functions needs to work even more closely together (eg HR)

Technology becomes increasingly important

branding

195
Q

3 effects of good marketing mix

A

business achieves its objectives

meet customers needs

competitive advantage

196
Q

key influence on marketing mix

A

business resources

technology

customer relationship’s

197
Q

what is the marketing mix for

A

to Deliver the Marketing Strategy

198
Q

choose customers

A

A Level Business (3 decks)

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