Marketing Flashcards
What is a market ?
A market occurs when there are buyers and seller eg the housing market
What is a market?
A market occurs when there are buyers and sellers, for example the housing market
What is marketing?
Provides a link between customer and business
Identify, anticipate satisfy customer needs and once
Maintain customer relationship and inspire loyalty
Define relationship marketing
Company seeks to build long-term relationship with customers by providing consistent satisfaction focuses on customer retention rather than one off sales
Describe the marketing process
Set marketing objectives
Gather marketing data
Analyse data
Select plan
Implement plan
Review effect
What are marketing objectives?
Marketing target
SMART
Helps achieve corporate objective
How important are marketingobjectives?
Compass market due to globalisation on the Internet therefore understanding customers and creating trusting relationships is vital
Define market orientated
One where the customers placed at the heart of everything that organisation does. Everyone in the business thinks about decisions from the customers perspective.
What are the types of marketing objectives?
Sales volume target
sales growth
sales value target
market growth
market share
brand loyalty
products differentiation
Define sales volume
The volume of sales is measured in terms of the number of units sold for example sales of 5 million cartons of drinks
Define sales value
The value of sales is measured in terms of how much is spent on a product for example sales of £30,000
Define market size by volume
The total units of sales of all the firms in a given market
Define market size by value
Multiplying the number of units sold by the selling price
Define sales growth
The percentage change in sales volume or value over a given period
Sales growth calculation
Change in sales/existing sales x100
What does it what does it mean if the sales growth the growth rate is negative?
Sales are falling
Define market share
Measure sales of business as a percentage of total sales on the market
Define market growth
Measures the change in size of market of time
Calculate market share
Market share=sales of firm A /total market size x 100
Calculate market growth
(New market size-old market size)/old market size x100
What is marketing
provides the link between customer and business
Identify anticipate satis
Define market research
Market research involves the gathering and analysis and evaluation of research to help support the implementation of marketing process
What is the purpose of marketing research?
It provides in-depth insights, allowing companies to better understand the market and identifies customers needs and preferences
Allows you to know more about the market itself
Find out about competition
Analyse existing position of the business
Decide in possible marketing objectives
Identify actions you want to take
Assess how effective previous marketing decisions have been
What does market research provide insight to?
Needs once and expectations of customers and how they are changing
customers behaviours and their market trends as well as a competitive landscape and who customers may prefer to purchase items from the income of the customer
what influences the decision to buy
do they buy it online or in person?
Define competitiveness and how does market research allow businesses to be competitive
Competitiveness is the extent any organisation to give good value for money relative to its competitors. A business is competitive if it offers better value for money than rivals market research provides businesses with information that helps them to make good marketing decisions for example what products to develop
Define primary research
Data collected firsthand for a specific research purpose for example, focus groups observation surveys telephone interviews test marketing experiments
What are the pros of primary research?
Directly focused to research objective
Kept private – not publicly available
More detailed insights – particularly into customer views
Up to date
Cons of primary research
Time-consuming and costly to obtain risk of survey bias
sampling may not be representative
Define secondary research
Dates that already exist in which has been collected for a different purpose for example publish market research oppose internal transaction data Google trade associations, media reports, newspaper, benchmark data and sensor
What are the pros and cons of secondary research?
Pros:
Often free and easy to obtain
Good source of market insight
Quick and easy to use
Usually based on actual data and large samples
Cons:
Quickly become out of date, possibly
Not tailored to businesses needs
Specialist reports is often quite expensive
Can be biased
Why is it important to conduct primary and secondary research
It’s important to conduct both because it can fill any knowledge gaps as well as optimise the value and accuracy of research results
How to primary and secondary research which one should be conducted first
Secondary research should be conducted first gain abroad and understanding of the topic at hand followed by primary research and narrow down the topics and enhance knowledge in the topic and make it more personalised
Define qualitative data
Data that is based on views and opinions, more in-depth research into the motivation behind attitudes and buying habits of customers for example group discussions
Define quantitative data
Data that is based on hard data and can be numerical for example questionnaires
Why is it important to conduct quantitative and qualitative data
Using both data pieces can improve evaluations by ensuring the limitations of one of those data are balanced by the strength of another which shows understanding. Qualitative data raises issues that can be looked at in more depth with quantitative analysis and vice versa.
Why is it important to conduct quantitative and qualitative data
Using both data pieces can improve evaluations by ensuring the limitations of one of those data are balanced by the strength of another which shows understanding. Qualitative data raises issues that can be looked at in more depth with quantitative analysis and vice versa.
Define market capitalisation
The value of a company that’s traded on the stock market calculated by multiplying the total number of shares x share price
Who buys shares?
UK individuals , banks,pension funds, insurance companies buy shares
In the UK how many shares do individuals own(%)
In the UK individuals own less than 15% shares
How many shares do foreign investors own in the uK (%)
Foreign investors own more than 50% of shares in the UK
Benefits of buying shares
Receive a share of profits via dividends
Increase in share price will increase value owned
Risks of buying shares
Share prices can fall for a variety of reasons
Low profits =low dividends
What happens in a recession?
Demand for goods and services falls -> lower sales-lowered revenue-less dividends -shareholders may sell shares
What is the share price of a private company ?
Initially set when shareholders subscribe for their shares
There after only determined when shares are bought/sold
No active market in the shares of a private company -so hard to juggle current value
Describe the share price of public company
Highly transparent -displayed publicly in real time
All trades are disclosed (how many bought /sold and for what’s price)
Share prices widely published and tracked
What are the factors that affect the share price of a public company within the company’s control?
Financial performance (eg profit gravity)
Dividend policy (how profits are distributed to shareholders
Relationship with key investors (including communication)
Managers
What are the factors that influence the share price of a public company out of company controls ?
State of economy
General market sentiment
Whether the company is a takeover target
Alternative investment in the company’s sector
What do index numbers show?
index numbers show percentage changes in data
What are business ethics?
Morals/values which help businesses decide which actions re right or wrong
What are examples of business ethics?
Should we advertise products to children?
Ahold we produce harmful products eg alcohol?
Should we charge a high price for a New medical drug because there’s no competition ?
Should a sweet shop be located near a school?
define correlation
Looking at an apparent link between 2 variables eg promotional spending and number of sales
Define positive correlation
An increase in one variable increases another variable and vice versa
Define negative correlation
As one factor goes up another goes down and vice versa
Define no correlation
No apparent relationship between variables
What does correlation usually look at ?
Correlation usually looks at sales rather than profits
How can managers predict demand?
If managers can identify key factors which determines demand they can estimate what is happening to these factors and predict demand
Essential when deciding on pricing policy
Define correlation value
Given as a value between -1and +1
Higher figure regardless of sign The stronger the correlation
Describe a strong correlation
Means there’s little room between data points and line
If data suggests strong correlation the. The relationship might be used to make marketing predictions
What indicates the strength of correlation?
Line of best fit indicates the strength of correlation
Describe a weak correlation
Means the data point are spread quite wide and far away from the line of best fit
What is extrapolation?
Looking at what happened to figures in the past and continuing this trend into the future
How do you conduct extrapolation?
Identify the trend
Draw line of best fit
Continue into the future
Use it to make predictions
Why might a trend not continue in terms of extrapolation?
Extrapolation is useful provided the identified trend continues into the future many markers are very dynamic and change rapidly
What are examples of why a trend in extrapolation may not continue ?
Technology
Economy
New competitor
Social change(becoming unfashionable)
Health scare
What do confidence levels do
Give an indication of how certain researchers are of the results
Eg 76% confidence level means researchers are 76% certain than their results are reliable and represent the population as a whole
What does degree of confidence depend on?
Size of sample
How the sample was constructed eg was it random?
The margin of error ie the confidence interval
Define confidence interval
Possible range of outcomes a given confidence level
Describe confidence intervals
Researchers could say 95% confident sale are between £200000 and £350000 -big margin of error
Define random sampling
Every member of the population has an equal chance of selection
Advantages of random sampling
Simple to design
A random sample is relativist quick to survey giving quick results
Lack of bias
It is a useful method if the firms unaware of the type of customers it will/does attract as a method with survey a range of people
Disadvantages of random sampling
It assumes all people are equally important so it’s less useful if the product is targeted at a specific market segment
A large sample is usually required meaning it can be expensive
Define stratified sampling
The population is divided into subgroups or strata based on specific characteristics such as age income and apgender ? Random samples are then taken from each subgroup giving everyone in the group equal chance of selection
When stratifying researchers tend to make sure that the proportions from each strata represent the population as a whole
Advantages of stratified sampling
It ensure representation from all relevant subgroups
It should provide results that are suited to the businesses needs as the people can match the background of the target markets
If buying behaviour is very different between different types of consumer thus method allows the business to examine. This
Lack of bias in selection
Disadvantages of stratified sampling
Time consuming and it requires detailed knowledge of the population structure
Define quota sampling
A sampling technique where specific quotas (numbers) or proportions are selected from each strata
What is quota sampling similar to?
Stratified sampling -as the population is divided in subgroups or stratified based on specific characteristics, however the required number of resoindents is then drawn from each group - this selection is not random the researchers choose who to sample
What is the value of sampling ?
Sampling saves time and money however there is a risk because the results are only based on a same,e and if the research was conducted badly then the sample won’t be representative of the target population
What does the value of sampling depend on ?
How the sample was selected eg only asking your friends or only asking men when women also buy the product .
the sample must represent the target population
How the same,e is conducted eg leading question
The sample size the smaller the smaller the less the results will reflect the target population
What do researchers need to consider when gathering data ?
When gathering data researchers need to consider whether their actions are ethical
Eg
Should they ask permission before filming shopping
Should they ask permission permission before tracking inline purchase then recommending ?
Why does market research not guarantee success?
Changes in the market eg new competitor/ technology meaning unfair is out of date
Secondary research may be in the wrong format
Sample may not reflect target population
Lack of finance to conduct thorough research
Decisions following research could still be poor
