MARKETING Flashcards
Customer base
group of customers the business sells product to
Market
all customers who are interested in buying product and have financial resources to do so
Target market
individuals identified by a business as the consumers of its product
consumer market
markets for goods and service bought by the final customer
industrial Market
markets for goods and service bought by other businesses to use in their production process
business environment
combination of internal and external factors that influence the operation of a business
Free trade
no barriers existing that might prevent trade between countries
Niche marketing
developing products for a small segment of market
mass marketing
selling same product to the whole market
Market segment
part of whole market in which customers have specific characteristics
market SEGMENTATION
dividing whole market into segments by consumer characteristics then targeting different product to each segment
what are the marketing department sections
SALES DEPARTMENT; responsible for selling product
MARKET RESEARCH DEPARTMENT: find customers needs, market changes and impact of competitors behavior
PROMOTION DEPARTMENT: advertising product
DISTRIBUTION DEPARTMENT: transport product to market
what are the roles of marketing
identify customers needs
satisfy customers needs
maintain customer loyalty
gain info about customers
anticipate changed in customers needs
why consumer pattern change?
(2 price, 3 change, 1 structure)
- price of competitor product
- price of product
- change in taste
- change in consumers income
- change in technology
- structure of population
why competition increases?
Government
development of e-commerce
growth of free trade
what does the government do to increase competition
DEREGULATION:removing government controls
FINANCIAL ASSISTANCE
LEGAL CONTROLS: preventing firm from dominating market
how to respond to competition?
- KEEP COST LOW use resourceS efficiently to reduce average cost
- DEVELOP PRODUCT, add features
- INCREASE PROMOTION to convince to buy
- MAINTAIN CUSTOMER RELATIONSJIP
- LOOK FOR NEW MARKET
disadvantages of mass market
more competition
customers look for something different which leads to division of whole market
what are the advantages of mass market
changes of consumer pattern won’t affect firm
. enjoy economies of scale
.potential for high sales
advantages of niche market
less competition
charge a high price
if market succeeds it may expand in future
disadvantages of niche market
changes in consumers spending habits can affect firm
no economies of scale
types of market segmentation
GEOGRAPHIC location
DEMOGRAPHIC age, gender,ethnic background
PSYCHOLOGICAL lifestyle and personality
benefits of market segmentation
goods and service designed to meet consumers needs, increasing sales
reduce waste of sources
charge higher price
WHATS MARKET RESEARCH
process of collecting, recording,analyzing data about customers and competitors for a product
what’s a unique selling point
special feature of a product that sets it apart from competitors product
MARKET ORIENTED
products are developed based on consumers demand as. identified by market research
PRODUCT ORIENTED
the firm decides what to produce and then tries to find buyers for product
primary research
collection of first hand data for specific needs of the firm
secondary research
collection of second hand data sources
quantitative research
collection of numerical data that can be analyzed using statistical techniques
qualitative research
the collection of information about consumers buying behavior ND THEIR OPINION ABOUT PRODUCT
sample
a representative sample of the target market selected to take part in market research
why is market research important?
- helps business find out what consumers like and dislike about their product
- identify consumers. taste and preference
3.identify competitors main unique selling point - know size of market
- decide on best promotion methods
- predict demand of product and how it’ll change
what are the benefits of Market orientated business
- lower risk of product failing
- product that meet needs of customers will last longer in market
sources of secondary data
newspaper, internet, libraries, market research agencies, government publications, business records
benefits of secondary research
cheap to obtain
easier and quicker to obtain
limitations of secondary research
may not be up to date
may not be reliable of useful as it may not have been collected for the same purpose required by business
benefits of primary research
1.up tp date data
2. data is directly relevant to business
3. info not. available for other businesses(competitive advantage)
limitations of primary research
- costly
- time consuming
- answers may be biased
what are focus groups
type of primary research, group of consumers are invited to discuss topics about product
advantages and disadvantages of FOCUS GROUPS
can provide detailed information about consumers opinion HOWEVER time consuming and expensive, peoples opinions may be influenced
what are observations?
takes form of recording watching and audits
advantages and disadvantages of observations
inexpensive HOWEVER, numerical data gathered so no explanation to behavior
what is test market
Limited amount of product is produced and sold in selected areas
advantages and disadvantages of test market
1.less waste and lower cost
2. identifying and solving problems in test market increases chance of a more successful intro to main market
HOWEVER, collecting info is expensive, takes longer to get to main market
advantages of sampling
helps saves time to father info about whole population
save cost as it is done in smaller group
what’s random sampling
every member of population has equal chance of being chosen
advantages and disadvantages . of. random sampling
not bias HOWEVER sample. may be unrepresentative
what’s quota sampling
people selected based on certain characteristics like age, gender,income, researchers choose who to interview.
what’s marketing mix
includes all activities and decisions that go into making the product, known as the 4 PS
PRODUCT
goods and service produced to satisfy customer wants and needs
BRAND
name, image or symbol that distinguishes product from competitors product
BRAND IMAGE
general impression of a product held by consumers
product life cycle
pattern of sales of product from intro to its withdrawal from market
extension startegies
marketing activities to extend maturity stage of product
PRICE
amount payed by customer to supplier when buying goods or service
product quality
product meets needs and expectations of customers
what’s market skimming
setting a high price for a new product that’s unique or different from any other product in market
what’s penetration pricing
setting very low prices to attract customers
what’s competitive pricing
setting a similar price to competitors price for a product that’s already established in market
what’s price leadership
smaller firms setting price based on price set by dominant firm in the industry
what’s loss leader pricing
setting price of a small number of products below costs to attract customers into outlet, hoping that they will buy other products to earn profit
what’s cost plus pricing
setting price by adding a fixed amount to the cost of making or buying product
what’s demand
quantity of goods and service consumers are willing and able to buy
revenue
price of product times quantity sold
what’s price elasticity of demand
measures by how much demand for a product changes when there is a change in price
what are the features of a successful product
- satisfies customers needs
- not expensive to produce
3.design performance, quality match brand image - unique selling point
BENEFITS of new product development
- in fast changing markets like hi tech, a business won’t survive unless it meets changing needs of customers
- increase potential sales and revenue
3.develpping new product before competitors will give business a competitive advantage - economies of scale
COSTS of new product development
- market research needs to be carried out which is expensive
2.if investment of product if financed by borrowing and product fails, business is at survival risk
3.requires large capital expenditure - no garuntee product will succeed
why is brand image important
- customers can recognize product easily
2.once customer loyalty is gained, business can charge higher prices - easier to launch new products under same name
role of packaging
- can influence consumers choice
2.packaging costs business money, increase final price
3.poor packaging may indicate poor product
why’s packaging important
- product product
- easier transportation of product
- helps provide information about product
- helps recognize product
5.keep product fresh once opened
introduction stage of product cycle
product introduced to market, low sales, business might make. loss
growth stage of product cycle
product becomes famous, sales increasing, product starts to earn profit
maturity stage
sales are no longer growing, most profitable stage
decline stage
sales start to fall, product is unprofitable
what are some extension strategies
1.introduce new variations to product
2. introduce new and improved version
3.sell thru other retail outlets
4. look. for other markets
5. improve packaging
6.oncrease advertising
phycological pricing
price set based on customers perception of product, HIGH PRICE INDICATING HIGH STATUS
NOT USIJG WHOLE NUMBERS
channels of distribution
how a product gets from producer to final customer
wholesaler
business that buys product in bulk from producer and sells it to retailers
retailer
shops and other outlets that sells products to final customers
middlemen
intermediaries in channels of distribution
direct selling
product is sold by producer directly to customer without middlemen
promotion
marketing activities to communicate with customers to inform them and persuade them to buy product
informative advertising
information about product communicated to customers to create awareness and attract interest
persuasive advertising
communication with customers aimed to get the to buy their product instead of competitors product
below the line promotion
promotion not paid for but uses incentives to encourage customers to buy
sales promotion
incentives used to increase short term sales or repeat purchase
personal selling
sales staff communicate directly with customers to achieve a sale and form long term relationship between firm and consumer
direct mail
printed materials sent directly yo address of customers
sponsership
payment by a business to have its name or product associated with an event
market budget
amount of money made available by a business for its marketing activities during. a period of time
e-commerce
use of internet and technologies by a business to sell goods and service
advantages of direct selling
- all profit earned by producer
2.producer controls all parts of marketing mix
3.producer has direct contact with consumer, useful market opportunities - fastest method
disadvantages of direct selling
- consumers won’t always see or try product before buying
2.all promotional activities financed and carried out by producer - high delivery costs
- storage payed byr producer
factors that determine which method od distribution
- costs
- mature of product
3market
Advantages of retailer method of distribution
1.consumers see and try product before buying
2.cost of inventories payed by retail
3.retailer pay for promotional activities
4. retailers more conveniently located
disadvantages of retailer methods of distribution
- retailer takes part of profit
- takes part control of marketing mix
3.producer pay delivery cost - retailers sell competitors product swell
Aima of promotion
- persuade to buy product
- explain how product is better than competitors
3.create and develop brand image - encourage wholesalers and retailers to stock product
5.reassure customers if there’s a problem with product - attract attention pf customers by making them aware of product or reminding them
types of promotion
- advertising
- sales promotiom
- sponsership
whats a marketing strategy
plan to achieve marketing objectives using a given level of resources
legal controls
laws that control the activity of businesses
barriers to trade
usually taxes, quotas, bans that a country places on goods of other countries to prevent or increase cost of them entering country
domestic market
market for goods and service that business owns
joint venture
agreement between two or more businesses to work together on a project
what are the common legal controls
- protect customers from faulty and dangerous goods
- prevent businesses from using advertising to mislead consumers
impact of legal controls on marketing strategy
- increase costs on business
- advertising may have to be withdrawn
- large company that dominates market may face legal; controls
problems of entering foreign markets
- difference in language and culture
2.economic difference - difference in legal controls
- lack of market knowledge
