Marketing Flashcards
what is the importance of identifying and understanding customers?
Generating sales - is much easier when a business has a clear idea of its customers and what they want. This enables the business to provide a product or service that directly meets customers’ requirements.
survival is one of the main aims of a new, small business and usually relates to the business continuing to operate for at least 12 months.
what is market segmentation?
Market segmentation is the process of splitting a business’ target market into different groups.
what are the different groups?
Age and gender
Income
Geography
Lifestyle
Reasons why businesses segment the market
Businesses do this to target the right products at the right people, to satisfy customer needs, and to increase sales and profits.
why is promotion used by businesses?
inform consumers of a new product or service
persuade consumers to buy a product or service
remind consumers about the benefits of a product or service
how is advertising used for promotion?
Adverts do this using
emotive language, which is designed to make people feel a certain emotion, including excitement, sadness or fear.
how is sales promotion used?
Special offers are a type of
sales promotion. They offer
incentives to persuade consumers to make a purchase. Examples include:
discounts
competitions
buy-one-get-one-free offers
free gifts
money-off vouchers
loyalty cards
how is direct marketing used by businesses?
Direct marketing is the process of marketing and selling products and services directly to customers. for example:
-junk mail
-spam emails
-catalogues
-phone calls
-text messages
how is branding used by businesses?
A brand image can be used as promotion, so businesses often want to establish a positive brand image. When a new product is launched under an established brand name, consumers may be more likely to purchase it because of their knowledge of the existing brand.
what is a promotional strategy?
A promotional strategy combines some or all of the above promotional methods to reach the target audience.
types of media:
Radio advertisements
Television adverts
Leaflets
Directory listings
types of digital marketing
Targeted online advertising
Mobile apps and advertising
E-newsletters and pop-ups
Digital adverts
Blogs
what is the purpose of market research?
Market research collects information that might help a business to be more successful and spot gaps in the market. By identifying the customers needs, the business reduces the risk.
what information does market research enable entrepreneurs to find out?
-what customers want
-what needs aren’t currently being met
-how much competition there will be
what target market
the business should aim at
-how much the business should charge for its product or service
What is primary market research?
Primary market research, also known as field research, is new research that a business undertakes itself. It involves collecting new
data and information that has not been collected before.
Primary research provides a business with customised research that is specific to its own circumstances.
how can primary market research be carried out?
A survey asks questions to get opinions and learn about customers’ experiences with a product or service.
A questionnaire is a set of questions to find out customers’ opinions. It can be done online, in person or through the post.
A focus group is a group interview. It can take place in person or online. In a focus group, people are asked questions or given scenarios and asked for their opinions about a product or service.
Observations involve watching customers to find out their reactions to certain products or services.
what are 4 advantages of primary research?
- specific to the business
- provides detailed information
- relevant and up to date
- gathers both quantitative and qualitative date
what are 3 disadvantages of primary research?
- time consuming
- expensive
- difficult to collect
what is secondary market research?
Secondary market research, also known as desk research, involves gathering existing data that has already been produced.
External research could include information from internet research, market reports and government reports.
what are 3 types of external market research?
- internet research includes data taken from competitors’ websites, newspaper articles and
social media - Market reports are industry specific. They may give specific information about an industry as a whole.
- Government reports may consist of general information that is not usually industry specific but can still be useful for a business.
what are 3 advantages of secondary research?
- quick and easy to gather
- can provide industry specific info
- often easy to analyse
what are 3 disadvantages of secondary market research?
- not specific to the business
- could be out of date
- biased of inaccurate
what’s the difference between qualitative and quantitative data?
Qualitative data provides a business with detailed information that cannot be expressed in a graph or chart. While qualitative data gives detailed information, it can be time consuming and costly to gather and analyse.
what are the advantages of having reliable market research?
-the business can make properly informed decisions
-reduces risk
-means less money is wasted
-gives a higher chance of business success
what are the consequences of having unreliable market research?
-the business making unwise decisions
-it could ultimately cost the business money
-the business could bring out products that don’t sell
-the business could fail
what are the channels of distribution?
The channels of distribution are the different ways in which a product gets from the producer to the end consumer.
what is a retailer?
A retailer is a business that sells goods to the public, often in a physical shop. It is common to use a retailer within a distribution channel.
3 types of retailers
-small independent traders
-supermarkets
-department stores
advantages of retailers
-customers are able to see and feel the quality of the products that they are interested in
-Retailers that sell a particular type of product may also be able to offer specialist advice
disadvantages of retailers
-retailers is that they require premises
- expensive to run
what is an e-tailer?
An e-tailer is a retailer that sells products and services to customers using an online store.
advantages of e-tailers
-offer a wide range of products as they are not limited by the size of a shop
-allow small producers to sell through their website for a fee
-their prices are often lower, as they do not have to pay for a physical shop
-customers can shop whenever and wherever they want, as e-tailers are open 24 hours a day, 7 days a week
disadvantages of e-tailers
-customers need to have internet access
-customers cannot pay by cash
-goods need to be delivered, so customers must be willing to wait
-items cannot be seen in person before purchasing them
what is e-commerce?
E-commerce refers to the buying and selling of goods and services online. It includes any transactions between businesses carried out
online
what are the 3 main types of distribution channel?
direct, modern, traditional
what is a direct channel of distriubution?
Manufacturer – Consumer
A direct channel of distribution
only involves the manufacturer and the customer.
advantage of direct distribution
control the distribution of their products and the prices that are charged
disadvantages of direct distribution
it can become increasingly difficult to sell directly to a large number of customers.
what is a modern channel of distribution?
Manufacturer - Retailer – Consumer
advantages of modern channela
-makes it easier for producers to distribute their products
-makes it more convenient for consumers to buy those products
Disadvantages of modern channels
-poor customer service could limit sales
-cause higher prices for the end consumer, as the intermediary must make a profit
what are traditional channels of distribution?
Manufacturer - Wholesaler - Retailer - Consumer
what is m-commerce?
refers to the buying and selling of goods and services online through a mobile device
advantages of m-commerce
-they are open 24/7
-purchases can be made from any location
-products and services can be delivered in a range of locations
-they make it easier to purchase products from overseas or far away
-they provide a much larger target market for businesses
what is the marketing mix?
The main purpose of marketing is to increase sales.
Product, price, place, promotion
what is a marketing strategy?
Planned activities designed to increase awareness or sales of a product or service.
how would the finance department use the marketing mix?
The finance department will want to ensure that prices are set at the level that will make the most profit.
how would the sales department use the marketing mix?
The sales department will want to ensure that promotions are effective, that prices allow them to maximise sales, and that distribution
how would the operations department use the marketing mix?
The operations department will be most concerned with the product element of the marketing mix. It must ensure that the business produces products that will enable it to maximise sales
when does the marketing mix change?
-changes in product
-changes to price
-changes to place
-changes to promotion
when setting a price what does a business need to consider?
the cost of making the product
the quality of the product
the brand image
the demand for the product
what are pricing strategies?
Methods businesses use to set their prices.
what is cost plus pricing?
Cost plus is where a business considers how much a product has cost them to produce, and then adds a mark-up to how much profit they want to make
what is competitive pricing
Competitive is where a business considers what their competitors are charging
what is penetration pricing
when a business charges a very cheap price to begin with, in order to build interest in a product or service
what is price skimming
where a business sets a high price when an item is new in the market, or an updated version is released. After a period of time, the price starts to reduce in order to keep demand high
what is psychological pricing?
where business price products that make customers believe they are paying less than they really are, it makes items seem cheap
what is loss leaders?
where a product or service is sold at a loss (less than it cost them to produce) in order to bring customers to a business.
what is discrimination?
Price discrimination is where different customers are charged different prices for the same products or services.
