Marketing Flashcards
Wat is meant by Marketing
the process responsible for identifying anticipating and satisfying customer requirements profitably
What is meant by Market Orientated
Focuses on the needs of consumers and uses this information to design products that meet customer needs. Consumers are at the centre of marketing decisions. Products will be developed which respond to consumer needs.
Advantages of being market orientated
- Increased customer satisfaction
- Increased customer loyalty
- Increased product quality
- Better product differentiation
Disadvantages of being market orientated
- Difficult to keep up with customer desires, leading to disappointed customers
Disadvantages of being product orientated
- Lack of market research, channeling so many resources into developing a high-quality product can risk neglecting market research and other areas that may help the company understand the consumer and the market, and missing out on niches
- Run the risk of their product or service becoming outdated
What is meant by Product orientated
Where the business develops products based on what it is good at making or doing, rather than what a customer wants
Advantages of being product orientated
- Focus on creating and offering high-quality goods and services
- Innovative products that focus on providing the best user experience, higher customer satisfaction
- Better market research, leading to less risk
- Once properly established you will have a more solid customer base
What is meant by asset-led marketing
Takes the best from both product and market orientation. It doesn’t only make decisions based on consumer needs but also product strengths. It uses the product name and brand image as a strength to market both new and existing products
Advantages of using asset-led marketing
- Internal strengths are relatively inexpensive
Disadvantages of using asset led marketing
- Struggle to keep up with changing customer demands
- Strengths may not be relevant to demands
What is meant by marketing mix
Made up of the four Ps – product, price, place and promotion. It is a marketing tool used to attract customers to a business, and all four elements should be carefully considered in order for a business to be effective
What is a product portfolio
A collection of the various products or services that a company offers. A business can use a product portfolio to identify how profitable its products are and whether its current range of products meets the needs of its business strategy
What is a unique selling point
Defines our company’s unique position in the marketplace, getting at the heart of your business: the value you offer and the problem you solve. A strong USP clearly articulates a specific benefit – one that other competitors don’t offer – that makes you stand out.
What is a brand
A name, sign, symbol, design or slogan linked to a particular product or service in order to differntiate from competition
What are the advantages of branding
- Helps differentiate from competitors
- Improved customer loyalty
- Brand equity, helps to promote new products and services
- Attracts talent
- Benefits from positive word of mouth
- Business growth
- Premium prices
- Increased revenue
Disadvantages of branding
- High advertising costs
- One mistake can tarnish brand reputation
- Loyalty can be fickle
What is meant by product differentiation
The characteristic or characteristics that make your product or service stand out to your target audience. It’s how you distinguish what you sell from what your competitors do
What are ways that products can be differentiated
- Pricing
- Packaging
- Marketing
- Product design
What is meant by the term extension strategies
The name given to the action a business takes when it identifies a product is close to entering the decline stage of the Product Lifecycle. These actions aim to extend the life of a product, by keeping the product within the maturity stage, and should improve sales.
List Extension strategies
- New variants, like limited time size or colour
- New packaging
- Product improvement, adding new features
- Bundle products, selling items in a group or package deal
- Reduce product price
- Increase marketing
What is in a product life cycle
Product sales along the Vertical axis
- Introduction
- Growth
- Maturity
- Decline
How does profit and cash flow change in the introduction stage
Zero/negative profit
Negative cash flow
all due to high costs of introducing a product to a market
How does profit and cash flow change in the growth stage
Cash flow becomes positive, as more money begins to come into the business
Possible for a profit to be made
How does profit and cash flow change in the maturity stage
High cash flow
High profit
How does profit and cash flow change in the decline stage
Overall profit available will begin decreasing
Cash flow begins to fall
What does the Boston matrix diagram look like
Star, has both high market share and high growth rate, need heavy focus and investment
Question Mark, has High growth rate but a relatively low market share, high investment and focus
Cash Cows, has high market share but a low growth rate, are milked for their profits and cash flow while minimizing further investment in them
Dogs, both low market share and low market growth, little investment and little attention
What is a price taker
An individual or company that must accept prevailing prices in a market, lacking the market share to influence market price on its own
A business that lacks the market share to influence the price in a market
What is a price maker
A company that can dictate the price it charges for its goods because there are no perfect substitutes, and have high market share
What is cost plus pricing
Adding a fixed percentage to the cost of making a product to arrive at its final selling price. This percentage is added on top of whatever price you would need to break even on a single unit or product
What is price skimming
A pricing strategy in which a firm charges a high initial price and then gradually lowers the price to attract more price-sensitive customers
What is penetration pricing
A pricing strategy that is used to quickly gain market share by setting an initially low price to entice customers to purchase. This pricing strategy is generally used by new entrants into a market
What is psychological pricing
A way businesses set prices to influence how customers perceive the value of a product or service. They do this by using tactics like pricing just below round numbers or choosing prices that sound appealing to make products seem more affordable or attractive
for example charging £9.99 instead of £10
What is contribution pricing
Setting a price based on the variable cost of producing or buying a product. The aim is to ensure the selling price generates an acceptable contribution towards covering the fixed costs of the business
What is meant by promotion
The way a business makes its products known to the customer, both current and potential
PS not all about advertising
What are the objectives of promotion
- To differentiate products or services
- To increase demand, and therefor sales
- To communicate with the market
- Increase brand awareness
What is meant by above the line promotion
The use of promotional methods that cannot be directly controlled by the company selling the goods or service
Methods of above the line promotion
- Television
- Radio
- Outdoor advertising
- Online media
What is meant by below the line promotion
Promotional activities where the business has direct control, and is aimed directly at the target audience
Methods of below the line promotion
- Sponsorship
- Direct Mail
- Email marketing
- Direct marketing
What is meant by channels of distribution
A distribution channel represents a chain of businesses or intermediaries through which the final buyer purchases a good or service. Distribution channels include wholesalers, retailers, distributors, and the Internet.
In a direct distribution channel, the manufacturer sells directly to the consumer
What is meant by multi channel distribution
Involves a business using more than one type of distribution channel, multiple ways to sell their product to customers
What is a wholesaler
An intermediary entity in the distribution channel that buys in bulk and sells to resellers rather than to consumers
What is a retailer
A business that sells goods to the public, often in a physical shop
What is internet marketing
A form of marketing that uses the Internet to promote a brand, product, or service via social media, search, email, and other digital channels
What is a global branding
The strategy of creating and maintaining a consistent brand identity across all countries and cultures
What is e-tailing
A retailer that sells products and services to customers using an online store, and therefore doesn’t need physical shop
What is meant by e-commerce
The buying and selling of goods or services over the internet
What is meant by m-commerce
The buying and selling of goods and services online through a mobile device
What is meant by social media
Any form of electronic communication that enables users to share ideas, content, information and messages
