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Higher Business > Marketing > Flashcards

Marketing Flashcards

1
Q

What is a product led business

A

A business where the product is developed and marketed intensely afterwards. Usually a technology driven product

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2
Q

What is a market led business

A

A business that develops a product based on intensive market research on customers needs and wants

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3
Q

4 differences between product led and market led

A

Business produce a product to what they BELIEVE the customer will want whereas the business develops a product based on what the customer wants.

No research into customer needs whereas high levels of research to determine what a customer wants.

Little or no competition in market, often new types of technology whereas very competitive markets.

Inflexible and unresponsive, cannot adapt to change whereas flexible to external factors and responsive to changes in customer needs.

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4
Q

What are the 3 types of customer behaviours/ types of purchases (with description)

A

Routine/ habitual- buying without thought- regular purchases e.g bread and milk

Impulse- sour of the moment without much thought- usually enticed by promotions.

Informed- required thought and potential research- usually for expensive purchases e.g holiday, car, new laptop.

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5
Q

What is field research

A

First hand info that the business gathers for a specific purpose by themselves
Primary information

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6
Q

What is desk research

A

Info that has been gathered by someone else that is then used by the business for a different purpose.
Secondary information

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7
Q

What are the 5 differences between field and desk research

A

Up to date, collected when required whereas historic and out of date info that already exists.

Time consuming to collect due to it needing to be gathered and analysed whereas easily accessible and quick to gather as available online 24/7

Only available to the business- competitive edge whereas available to everyone including competitors.

Can be expensive and timely as researcher needs trained and paid whereas relatively inexpensive as wide access if you have internet access.

Accurate and relevant as questions designed to suit needs whereas info may be vague and irrelevant as original purpose may be unknown.

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8
Q

What is a similarity between desk and field research

A

Both may contain bias

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9
Q

What is a personal interview

A

Face to face meeting where a respondent is asked questions

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10
Q

3 advantages if personal interview

A

Allow organisation to gain views of customers

Clarify any questions to aid understanding as it is 2 way communication

Body language and nonverbal cues can be analysed

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11
Q

2 disadvantages of personal interview

A

Expensive as market researcher needs trained

Time consuming to carry out interview and analyse info.

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12
Q

What is a postal survey

A

A list of questions sent through the post, filled in and returned

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13
Q

4 advantages of postal survey

A

Wide geographic area

Inexpensive- no market researcher

Target areas with specific attributes- high income households

Customers can complete survey at a time that suits them

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14
Q

3 disadvantages of postal survey

A

Response rate low- seen as junk mail

May require an incentive to return

Questions cannot be clarified

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15
Q

What is an online survey

A

A list of questions completed on the internet

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16
Q

3 advantages of online survey

A

Wide geographic area- large sample size- more representative.

Relatively inexpensive- done online

Software enables easy analysis of results

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17
Q

2 disadvantages of online survey

A

Limited to people with internet access

Many have pop up blockers

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18
Q

What is a telephone survey

A

A list of questions asked over the telephone

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19
Q

3 advantages of telephone survey

A

Instant feedback given

Wide geographic area reached

Relatively inexpensive

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20
Q

2 disadvantages of telephone survey

A

May be seen as invasion of privacy/ nuisance- low response rate or difficult to engage with respondents.

People have blockers for unknown numbers

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21
Q

What is social networking

A

Gathering information and reviews form customers who post comments

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22
Q

Advantage of social networking

A

Can gather large amounts of information quickly

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23
Q

4 disadvantages of social networking

A

Due to volume of social media traffic, you may need to pay to promote posts to get required engagement from audience

Can only gather info from those who use social media

Comments public so competitors can read reviews.

You may be targeted by trolls

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24
Q

What is a hall test

A

Respondents try product/ service and offer instant feedback

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25
Q

2 advantages of hall test

A

Relatively inexpensive to carry out

Feedback can be gathered instantly

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26
Q

Disadvantage of hall test

A

As customer is giving direct feedback, they may nit want to give negative feedback- may contain bias

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27
Q

What is a focus group

A

A group interview in person or online

People asked questions and given scenarios and asked for their opinion on a product/ service

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28
Q

2 advantages of a focus group

A

Detailed in depth feedback can be given

Participant more likely to give honest feedback as they have agreed to take part.
Non verbal cues and body language can be observed

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29
Q

3 disadvantages of focus group

A

Qualities information can be difficult to analyse

Participants require payment

Some members may dominate, hinder participation of some members

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30
Q

What is a consumer panel

A

Group of individuals that give feedback over time- gain insight into their attitudes, behaviours and purchasing habits

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31
Q

3 advantages of consumer panel

A

You can select panel members to best represent customer base

Acquire direct and timely feedback and insights from members

Face fi face allows nonverbal interactions between members to be observed

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32
Q

2 disadvantages of consumer panel

A

Generally expensive to run and selecting right group can be time consuming

Some members may dominate or lead participants which can lead to bias responses

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33
Q

What is observation

A

Watching customers to find out their reactions to certain products

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34
Q

2 advantages of observation

A

Can provide accurate quantitative information

Customers will act naturally as they do not know they are being watched

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35
Q

2 disadvantages of observation

A

No direct contact with customers to ask specific questions

Samples are often random and not representative of all customers.

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36
Q

What is EPOS

A

information on customers buyign habits are observed through electronic point of sale. e.g regular purchases or the effect that changing prices or promotiona may have on sales.

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37
Q

2 advantages of EPOS

A

gathers info about consumer behaviour- which can be reacted to to increase sales

promotions can be tailored to individual customers

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38
Q

2 disadvantages of EPOS

A

the initial set up can ne expensive

if money off voucheds are offered, it may lower profits

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39
Q

Why is field research accurate

A

It is collected by the organisation so it should be relevant to their needs

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40
Q

Why is field research up to date

A

It is collected when it is required

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41
Q

Why is field research specific

A

The organisation choose and tailor the question to be asked to suit their research needs

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42
Q

Why is field research bias

A

The market researcher may lead or influence the respondents answers

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43
Q

Why is field research time consuming

A

Must wait for interviews/ surveys to be completed, returned and analysed.
Interviewers may need to be trained

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44
Q

Why is desk research bias

A

The original source and purpose is unknown

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45
Q

Why is desk research cost effective

A

Don’t need to pay market researcher
Internet access is relatively cheap
Large volumes of info can be accessed

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46
Q

Why is desk research accessible

A

Information on the internet is widely available 24/7

47
Q

Why is desk research out of date

A

You may not know when source was originally written
The info may no longer be accurate as it wasn’t collected at the time

48
Q

Why is desk research irrelevant

A

Collected for a different purpose originally so may not be specific to your requirement

49
Q

What is random sampling

A

Choose a random list of individuals to survey.
Need a large sample to be representative of the whole population

50
Q

4 features of random sampling

A

Individuals selected with no specific criteria

Large samples required to be credible- may make the process more expensive

If large sample obtained- more credible and representative

Limits bias which may occur as it is random

51
Q

What is quota sampling

A

Researcher is instructed to survey a certain number of individuals with certain characteristics e.g age, gender, income, marital status etc.

52
Q

4 features of quota sampling

A

Choose individuals based on relevant characteristics

Sampling done with a selected group- decreases costs

Results likely to be less representative as only small number surveyed

Participants chosen by interviewer- bias may occur

53
Q

What are the 7 Ps of the marketing mix (plus definition)

A

Product- good or service for sale- just satisfy customer needs

Price- the amount the customer will pay to purchase the product

Place- where the buyer and seller meet- where the sales transaction takes place

Promotion- any form of communication to make customers aware of a product and persuade them to buy it

Physical evidence- the physical environment experienced by the customer- layout of store or website

Process- systems and procedures that are put in place to deliver a product or service to the customer

People- the employees and customers facing staff who represent your business/ brand are integral to your success.

54
Q

What are the 5 parts of the product life cycle

A

Research and development

Introduction

Growth

Maturity/ saturation

Decline

55
Q

What is research and development

A

GAPTAP a prototype is made, tested and altered.

Costs to create and design products are high

No sales, high costs- making a loss

56
Q

What is introduction

A

The product is launched into the market.
High production, equipment and promotion and advertising costs

Sales and growth slow- limited customer awareness

A loss is likely to occur due to high costs and low sales revenue

57
Q

What is growth

A

Sales increasing rapidly as product becomes established in the market.

Brand loyalty develops and repeat purchases made- product becomes profitable and sales revenue grows rapidly.

Competitors begin entering market

58
Q

What is maturity and saturation

A

Sales and profits are at their highest/ maximum

Product may face increased competition

Market becomes SATURATED as most of the target market have already bought the product.

59
Q

What is decline

A

Sales and profits begin to decline/ fall because consumers tastes change, competitors products are introduced or technology is advancing.

The product may remain profitable for a short time but as sales decline a loss with new incurred.

60
Q

What are the 6 different extension strategies with descriptions

A

Changing the ‘use’ of the product- change use to appeal to different markets

Lower the price- make the product more affordable/ appealing to some markets

Change place product is sold- increasing places sold can increase potential customers- e,g e-commerce offers wide geographical coverage

Develop new variants- appeal to different markets, also updating to latest technology so customer upgrades

Rebrand (change name)- create new interest, appeal to wider audience

Change packaging- make product appeal to new market segments or make product more environmentally friendly- attract ethical buyers

61
Q

What are the 4 different product types in a product portfolio (include market share and market growth)

A

Dogs- low market share and low market growth

Question marks- low market share and high market growth

Cash cows- high market share and low market growth

Stars- high market share and high market growth

62
Q

What do stars do in product portfolio

A

Require consistent investment in marketing as it is a competitive market in order to sustain growth

Can allow business to become a market leader

Can become cash cows over time

63
Q

What do cash cows do in product portfolio

A

Generate cash that a business can ‘milk’ as long as possible

Usually require little marketing due to less competition

Funds generated can be used to further strengthen stars or in uses such as question marks

64
Q

What do question marks do in a product portfolio

A

Hugh growth potential due to position in promising markets

Need development, investment and a strong marketing mix to turn them into stars.

65
Q

What are dogs in the product portfolio

A

Failing markets/ outdated products

Can adversely affect products and should be removed from the market.

66
Q

What is a LINE product portfolio

A

A group of similar products made under one brand name e.g Heinz

67
Q

What is a diversified product portfolio

A

A group of products made under one beans but target completely different markets

68
Q

What are 5 advantages of having a wide product portfolio

A

Business can spread risk over different markets

Meet needs of different market segments and appeal to more customers

Increases awareness of the brand as a whole

Easier to launch new products if you have a large portfolio

Can help with seasonal fluctuations by diversifying

69
Q

What are the 4 disadvantages of a wide product portfolio

A

High costs involved in researching and developing so many products

Bad publicity for one product can affect the whole brand

High costs to promote so many products

Resources assigned to new products may affect performance of existing products

70
Q

3 advantageous parts of Boston matrix

A

Cash cows- fund riskier investments such as developing question marks or marketing stars

Stars allow business to become market leader- increases overall brand recognition/ image

Question marks- give opportunity to invest and grow

71
Q

Disadvantageous part of Boston matrix

A

Dogs- if not removed they can drain business profits

72
Q

What is skimming pricing

2 advantages

2 disadvantages

A

Short term price strategy where product is introduced at a high price in a market with little to no competition. The price is gradually lowered as competition enters the market

+ allows business to make large initial profits

+ allows business to build high quality image

-may lose out in sales if priced to high

-when price is eventually dropped customer who bought at initial price will become dissatisfied

73
Q

What is penetration pricing

2 advantages

2 disadvantages

A

Short term pricing strategy when introducing new product where price is introduced at a lower price to entice customers and gradually increases as the business gains market share

+ encourages customers to buy the product

+ higher price can be charged once customers become loyal

-low profits during initial low price stage

-low price could be perceived as lower quality by some customers

74
Q

What is destroyer pricing

2 advantages

2 disadvantages

A

Used to eliminate competition from market by setting very low prices- most often loss making prices.
Competitions cannot match these prices and may go bust

+after initial loss making period the business will have increased market share and increased prices again

+forces competition out of the market

-usually only large, powerful businesses can sustain loss making tactics

-destroyer pricing is illegal in the UK

75
Q

What is promotional pricing

2 advantages

1 disadvantage

A

Short term pricing strategy where prices are reduced for a period of time through the use of discounts and special offers

It may be used to increase interest or to help clear old and obsolete stock

+encourages customers to try new product and may lead to repeat purchases

+often encourages customers to buy in increased quantities- which increases profits

-lower profit during promotional price.

76
Q

What is loss leader pricing

3 advantages

2 disadvantages

A

The price of a product is greatly reduced to a point where no profit is being made. It is done to attract customers into the store to purchase other profitable products at the same time.

+increase footfall for the business

+can lead to repeat purchases after offer is finished

+consumers may purchase other items not on sale

-no profit is made on sales of loss leader products

-consumers may only buy the products on sale- leads to a loss.

77
Q

What is psychological pricing

1 advantage

A

When prices are set at £199, £19.99 or £7.99. Used to make customers perceive the price is lower than it actually is.

+consumers think they are getting a bargain so sales increase

78
Q

What is cost-plus pricing

2 advantages

2 disadvantages

A

Calculating the production cost and then adding a percentage of profit required by the company.

+makes sure all production costs are covered.

+by adding a percentage to average cost, the organisation can predict when they will break even and start to make a profit

  • doesn’t always consider external factors e.g competition prices or economic climate

-indirect costs not included in calculation- could affect profit

79
Q

What is discriminatory pricing

2 advantages

2 disadvantages

A

Used when the demand for a product/ service may change due to changes in consumer demand. E,g may pay different prices at different times of day or year
E.g train tickets, holidays, airports

+increased profit when demand is high through increased prices

+ensures sales when demand is low by reducing prices

-effective research method must be used and paid for to track demand

-pricing needs to be constantly changed which adds to costs

80
Q

What are the 3 different channels of distribution

A

Manufacturer- wholesaler- retailer- customer

Manufacturer- retailer- customer

Manufacturer- customer (direct selling)

81
Q

What are the 6 different things that could affect choice of channel of distribution

Include description

A

Finance available- may not have funding available to set up e-commerce, print catalogues or sell direct therefore using wholesalers/ retailers may be the only option

Image for product- certain images may dictate where they are sold e.g high profile/ profit/ exclusive brands will only sell in specific outlets

Stage in product lifecycle- in introduction may sell in exclusive outlets whereas in decline may sell in discounters e.f TK Maxx

Legal restrictions- some goods can only be sold through certain channels leg prescribed medication or alcohol.

Shelf life- some products will need to be shipped fasted to customer/ retailer is they are perishable

Technical qualities- some goods may require demonstrations therefore personal selling may be chosen over direct selling.

82
Q

What does it mean to sell via a wholesaler

A

The wholesaler buys in bulk from the manufacturer and divide them into smaller amounts to sell to retailers or customers

83
Q

What does it mean to sell via a retailer

A

Some large retailers buy in bulk in similar quantities to a wholesaler

84
Q

What is direct selling

A

When the product goes directly from the manufacturer to the consumer

85
Q

3 advantages of selling via wholesaler

A

Reduces transport costs for manufacturer as wholesalers buy in bulk

Wholesalers takes on the risk and cost of storing the stock

Wholesaler can repackage and label products in smaller quantities- less work/ costs for manufacturer.

86
Q

3 disadvantages of selling via wholesaler

A

Manufacturer loses some profit to the wholesaler

Manufacturer loses control of how the product is sold and marketed

Wholesaler may damage the reputation of the manufacturer of product isn’t sold correctly

87
Q

3 advantages of selling via retailer

A

Convenience- retailers are located close to customers

The retailers display and market the goods and offer after sale services

Retailer can provide customers with info on product

88
Q

3 disadvantages of selling via retailer

A

Manufacturer will lose some profit to retailer

Products are often displayed next to competition

Manufacturer loses control of how the product is sold and marketed

89
Q

3 advantages of direct selling

A

Products can be tailored to consumers specific requirements

Cuts out ‘middle men’ which increases profit

Manufacturer has more control over how the product is marketed

90
Q

2 disadvantages of direct selling

A

Increased costs due to advertising, storage and administration costs.

Time and cost incurred in organising product delivery

91
Q

what is mail order

3 advantages

4 disadvantages

A

goods ordered the catalogue

+credit facilities may be offered
+save on staffing and store costs
+customers can shop from home

-catalogues can be expensive to print

  • not environmentally friendly
  • if offer credit- you may incur debt
  • may be high volume of returns
92
Q

what is ecommerce

5 advantages

5 disadvantages

A

selling online

+can be 24/7 access worldwide
+from home/ on the go access
+entire/large ranges can be displayed
+product reviews can help purchase decisions

-attractive user-friendly websites are expensive to build and maintain
-time taken between order and delivery
-cant try before you buy
-delivery and return costs
-credit card/ security concerns

93
Q

what is personal selling

2 advantages

2 disadvantages

A

sales person to door/ on the phone

+allows demonstration and explanation to be given to customer
+feedback can be given from customers

-staffing osts and commission may make this method expensive
-some customers find this method intrusive/ a nuisance and so offer a negative response

94
Q

what are tv shopping channels

3 advantages

3 disadantages

A

a presenter promotes an item on specific TV channels

+captive audience (home)
+lots of details and demos can be shown/given
+can use promotions and flash deals to grasp attention/ entice customers

-people may just switch off
-wait for delivery/ delivery costs
-cant try before you buy

95
Q

what is direct mail selling

2 advantages

2 disadvantages

A

letters or advertising leaflets sent to customer

+specifically target correct segment of the market for the product
+wide geographical reach can be targeted

-low response rate- may be recieved as junk mail and disregarded
-mailing list can become out of date- so wrong people targeted

96
Q

what are the 8 methods of advertising

A

TV
Radio
Cinema
Apps
Direct mail
Internet
Magazines
Billboards

97
Q

what are the 8 sales promotions

A

BOGOF
Free gifts and samples
New customer offers
Voucher codes
Flash sales
Loyalty cards
Free delivery
Like and share competitions

98
Q

what is into the pipeline promotion

A

sales promotions offered by the manufacturer to encourage retailers to purchase products from them

99
Q

what are out of the pipeline promotions

A

sales promotions offered by the retailer to encourage customers to purchase products from them

100
Q

what are the 5 into the pipeline promotions

A

SALE OR RETURN- retailer can return unsold stock- try new products with less risk

POINT OF SALE DISPLAYS- free posters, racks, holders, window displays given to retailer to display product to customer

DEAL LOADERS- bulk- buying discounts when they buy a large volume of products

STAFF TRAINING- given if the product/ service requires technical explanations/ demos i.e car manufacturers train car sales persons

TRADE CREDIT- manufacturer offers retailers to pay for goods at a later date. Can often sell stock before paying for it which is good for cash flow

101
Q

what are the 5 out of the pipeline promotions

A

SPECIAL OFFERS- short term offers encouraging customers to try new products- good way of selling excess stock

FREE GIFT/ TRIALS/ SAMPLES- used to entice and encourage first purchase. gifts may not appeal to all markets

COMPETITIONS- entered in a prize draw to entice shoppers

DEMONSTRATIONS- a demo or trial to encourage purchase i.e test drive

LOYALTY SCHEMES- collect points by making purchases where they can then be converted into discounts or money off. Info can be gathered on spending habits used to target promotions

102
Q

what are public relations

A

public relations is the act of controlling the image of the business percieved by the public. It involves communicating with stakeholders to improve the organisations image.

103
Q

what is PR used for

A

gain media coverage to raise awareness for brand

Communicate with shareholders and to share information

To create a positive image, reputation and CSR

To respond to negative press with the intention of turning it into an opportunity for positive attention

Launching or repositioning a product

104
Q

what is a press conference

advantage and disadvantage

A

press are invited to a presentation given by the organisation to…
+share thorough information about the brand/ new product release
- requires time to plan and press can ask challenging/ tricky questions

105
Q

What is a sponsorship

Advantage
Disadvantage

A

Companies pay to sponsor and have their name associated with different events e.g Olympic Games

+mass coverage/ exposure

-extremely costly

106
Q

What is a press release
Advantage
Disadvantage

A

Written statement that is given to the media to inform them of information that they want to communicate with the public

+can be used to manage bad press

-takes time to prepare and word carefully

107
Q

What is a charitable donation

Advantage
Disadvantage

A

Letting the public know you donate or support a charity

+enhance social responsibility, encourages customers to purchase over competitors

-costly- shareholders may be unhappy

108
Q

What is product merchandising
Advantage
Disadvantage

A

Hand out items with brand name e.g pens, key rings, tote bags

+reminds people of business

-may be perceived as wasteful, cheap or tacky

109
Q

What are company visits
Advantage
Disadvantage

A

Allow members of the public to tour a factory/ premises

+positive reputation- shows business has nothing to hide. May attract new staff

-takes time to arrange and hold and may be a health and safety issue

110
Q

What is celebrity endorsement

Advantage
Disadvantage

A

Celebrity is paid to endorse a whole brand or one product

+people purchase to associate with celebrity

-if celebrity gets bad press it could be reflected onto the business

111
Q

What is product placement

Advantage
Disadvantage

A

Placing branded foods in a V movie or series or music video

+can target specific audiences
+makes brand more appealing when associated with the programme

-can be very expensive to be featured in the right film.

112
Q

What is physical evidence extended marketing mix

A

The physical environment experienced by the customer. Design/layout should be simple, straightforward and appealing.
Considerations: cleanliness, eye catching displays, car parking, toilets, music, atmosphere, lighting, temperature, comfort, smell.
Reviews on websites count as physical evidence

113
Q

People- extended marketing mix

A

Employees who are in contact with the customer. The ‘people’ must provide great customer service to increase customer satisfaction.
How to do so?..
Train staff- motivated and knowledgable staff
After sales service
Customer care strategy/ service policy
Customer complaint procedures
Thorough recruitment and selection process to ensure the best and high calibre staff hired

114
Q
A

Higher Business (5 decks)

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