Marketing Flashcards
Objectives of marketing
-attract consumers so increase revenue/profit e.g. increase sales by 10% within 3 years.
-maintain/increase market share by being seen as the best e.g. M&S use food adverts.
-target a new market or new segment to increase sales.
-increase global sales e.g. via website or marketing to establish product in new market.
Constraints on achievement of marketing objectives
-image of product or organisation with some consumers.
-lack of finance can affect the size of the marketing budget.
-legal requirements e.g. marketing of tobacco products is illegal in many areas.
-level of competition as it is harder to be successful in competitive market.
Being product led assumes that:
-the product being sold is the best on the market and will be easy to sell.
-the product is unique therefore no real competition exists.
-no need to research or modify the product to attract consumers attention.
Being market led assumes that:
-satisfying consumer needs and wants is necessary or main purpose.
-market research and testing is critical in understanding the consumer.
-constant and quick modifications to the product are needed to suit changing consumer tastes.
In reality businesses use a combination of both market and product led approaches:
-carry out market research to understand their market.
-carry out product research in line with findings and also to identify modifications.
-focus groups and test marketing are used to check suitability.
Types of buying behaviour
-routine purchases are habitual and requires little thought by the buyer.
-informed decision making purchases will require some degree of consideration and possible research.
-impulse purchases are bought without prior thought.
How can research be used to improve the effectiveness of an organisation?
-it can help identify specifics of the market the business operates in- size or number of existing and potential consumers e.g. spending patterns.
-it can help assess the strength and activities of competitors- name, location, market share and unique selling point.
-spot a gap in the market that has potential to make a lot of money- identify a product not currently available or a new market which the business can enter will increase their product range and profits by increased sales.
-assess how successful the marketing mix is- finding out consumers opinions of the product, the current packaging, colour, and improve sales of the product and profit.
Features of quota sampling
-is used if the average consumer profile is known and it involves picking respondents with specific characteristics within the target market.
-researcher is told precisely how many to interview and their characteristics so they must find and interview a specific number of consumers who match the requirements.
-cheaper than random sampling as any suitable candidate can be interviewed.
-results may not represent target market because interviewer bias impacts who is picked to complete survey.
Features of random sampling
-respondents are picked randomly from a list.
-register with each person having an equal chance of being chosen randomly.
-simple system and should be free from bias because selection is random.
-it is expensive to run as those selected must be interviewed- time consuming.
Features of desk research
-secondary information.
-websites give a great deal of information about the external environment the business operates in and must be responsive to.
-trade journals give specialist knowledge and research on the market which can help with understanding current influences in the market place.
-statistics including government figures which can help with understanding current influences in the market place.
Methods of field research
-personal interview
-postal survey
-test marketing
-observation
Advantages and disadvantages of personal interviews
✅two way communication, clarification can be given
✅misunderstandings dealt with quickly
✅skilled trained researcher expert at task
❌cost of holding one-to-one meetings
❌time consuming to carry out and analyse results
❌personal interviews are unpopular
Advantages and disadvantages of postal surveys
✅inexpensive as no skilled interviewer is required
✅no interviewer bias as respondent independent
✅easy to segment market via post codes
❌time needed to design a good questionnaire
❌simple questions only which means cannot seek clarification
❌low response rate so incentive needed
Advantages and disadvantages of test marketing
✅modifications possible prior to introduction
✅greater chance of long term success
✅expensive launch of flawed product avoided
❌consumers may have regional bias so do not reflect target market
❌poor marketing may still result in a failed launch
Advantages and disadvantages of observations
✅accurate quantitative information is gained
✅large number of consumers can be surveyed over a short period of time
❌unable to ask questions about behaviour/specific questions
❌cost of setting up and running observation suite
State the extended marketing mix (involved with delivery)
-people- is employees who comes into contact with customers and affect service provision.
-process- is systems used to deliver the service.
-physical evidence- is where the service is being delivered from.
What are the elements of the marketing mix that relate to each other?
-a product with high production costs needs a high price to cover costs.
-to establish an exclusive product a higher price will be charged.
-a product with a good image will need less promotion.
-price may be increased to cover costs of promotion.
Define market research and product research
-market research is designed to identify who the customer is, what customers want from the product, identify and highlight gaps in the market.
-product research is designed to improve existing products, develop new products and take advantage of emergent technologies.
What are the stages of the product life cycle?
-research and development.
-introduction.
-growth.
-maturity.
-saturation.
-decline.
Explain the research and development stage
-product is not yet in the market so there are no sales.
-losses are made as high R&D costs and no sales.
-prototypes being developed and best version is chosen.
-how much to charge to established for launch.
-pre-launch advertising to inform consumer.
-agreement with retailers being put in place or own outlets primed.
Explain the introduction stage
-low sales but aim of building awareness of the product.
-still loss making as high launch and promo costs still being paid and low revenue.
-one model is launched.
-short term pricing tactic is used.
-heavy promotion takes place to raise customer awareness.
-limited number of distribution methods used while relatively unknown.
Explain the growth stage
-rapidly increasing sales and much greater public profile.
-becoming profitable with increased sales and lower costs.
-improved by making minor modifications in response to initial sales and feedback.
-long term strategy employed.
-new promotions used to target new potential consumers.
-growing number of locations and places helps improve consumer access.
