Marketing Flashcards
What is a product led business
A business where the product is developed and marketed intensely afterwards. Usually a technology driven product
What is a market led business
A business that develops a product based on intensive market research on customers needs and wants
4 differences between product led and market led
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.
What are the 3 types of customer behaviours/ types of purchases (with description)
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.
What is field research
First hand info that the business gathers for a specific purpose by themselves
Primary information
What is desk research
Info that has been gathered by someone else that is then used by the business for a different purpose.
Secondary information
What are the 5 differences between field and desk research
Up to date, collected when required whereas historic and out of date info that already exists.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.
What is a similarity between desk and field research
Both may contain bias
What is a personal interview
Face to face meeting where a respondent is asked questions
3 advantages if personal interview
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
2 disadvantages of personal interview
Expensive as market researcher needs trained
Time consuming to carry out interview and analyse info.
What is a postal survey
A list of questions sent through the post, filled in and returned
4 advantages of postal survey
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
3 disadvantages of postal survey
Response rate low- seen as junk mail
May require an incentive to return
Questions cannot be clarified
What is an online survey
A list of questions completed on the internet
3 advantages of online survey
Wide geographic area- large sample size- more representative.
Relatively inexpensive- done online
Software enables easy analysis of results
2 disadvantages of online survey
Limited to people with internet access
Many have pop up blockers
What is a telephone survey
A list of questions asked over the telephone
3 advantages of telephone survey
Instant feedback given
Wide geographic area reached
Relatively inexpensive
2 disadvantages of telephone survey
May be seen as invasion of privacy/ nuisance- low response rate or difficult to engage with respondents.
People have blockers for unknown numbers
What is social networking
Gathering information and reviews form customers who post comments
Advantage of social networking
Can gather large amounts of information quickly
4 disadvantages of social networking
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
What is a hall test
Respondents try product/ service and offer instant feedback
2 advantages of hall test
Relatively inexpensive to carry out
Feedback can be gathered instantly
Disadvantage of hall test
As customer is giving direct feedback, they may nit want to give negative feedback- may contain bias
What is a focus group
A group interview in person or online
People asked questions and given scenarios and asked for their opinion on a product/ service
2 advantages of a focus group
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
3 disadvantages of focus group
Qualities information can be difficult to analyse
Participants require payment
Some members may dominate, hinder participation of some members
What is a consumer panel
Group of individuals that give feedback over time- gain insight into their attitudes, behaviours and purchasing habits
3 advantages of consumer panel
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
2 disadvantages of consumer panel
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
What is observation
Watching customers to find out their reactions to certain products
2 advantages of observation
Can provide accurate quantitative information
Customers will act naturally as they do not know they are being watched
2 disadvantages of observation
No direct contact with customers to ask specific questions
Samples are often random and not representative of all customers.
What is EPOS
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.
2 advantages of EPOS
gathers info about consumer behaviour- which can be reacted to to increase sales
promotions can be tailored to individual customers
2 disadvantages of EPOS
the initial set up can ne expensive
if money off voucheds are offered, it may lower profits
Why is field research accurate
It is collected by the organisation so it should be relevant to their needs
Why is field research up to date
It is collected when it is required
Why is field research specific
The organisation choose and tailor the question to be asked to suit their research needs
Why is field research bias
The market researcher may lead or influence the respondents answers
Why is field research time consuming
Must wait for interviews/ surveys to be completed, returned and analysed.
Interviewers may need to be trained
Why is desk research bias
The original source and purpose is unknown
Why is desk research cost effective
Don’t need to pay market researcher
Internet access is relatively cheap
Large volumes of info can be accessed
Why is desk research accessible
Information on the internet is widely available 24/7
Why is desk research out of date
You may not know when source was originally written
The info may no longer be accurate as it wasn’t collected at the time
Why is desk research irrelevant
Collected for a different purpose originally so may not be specific to your requirement
What is random sampling
Choose a random list of individuals to survey.
Need a large sample to be representative of the whole population
4 features of random sampling
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
What is quota sampling
Researcher is instructed to survey a certain number of individuals with certain characteristics e.g age, gender, income, marital status etc.
4 features of quota sampling
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
What are the 7 Ps of the marketing mix (plus definition)
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.
What are the 5 parts of the product life cycle
Research and development
Introduction
Growth
Maturity/ saturation
Decline
What is research and development
GAPTAP a prototype is made, tested and altered.
Costs to create and design products are high
No sales, high costs- making a loss
What is introduction
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
What is growth
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
What is maturity and saturation
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.
What is decline
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.
What are the 6 different extension strategies with descriptions
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
What are the 4 different product types in a product portfolio (include market share and market growth)
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
What do stars do in product portfolio
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
What do cash cows do in product portfolio
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
What do question marks do in a product portfolio
Hugh growth potential due to position in promising markets
Need development, investment and a strong marketing mix to turn them into stars.
What are dogs in the product portfolio
Failing markets/ outdated products
Can adversely affect products and should be removed from the market.
What is a LINE product portfolio
A group of similar products made under one brand name e.g Heinz
What is a diversified product portfolio
A group of products made under one beans but target completely different markets
What are 5 advantages of having a wide product portfolio
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
What are the 4 disadvantages of a wide product portfolio
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
3 advantageous parts of Boston matrix
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
Disadvantageous part of Boston matrix
Dogs- if not removed they can drain business profits
What is skimming pricing
2 advantages
2 disadvantages
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
What is penetration pricing
2 advantages
2 disadvantages
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
What is destroyer pricing
2 advantages
2 disadvantages
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
What is promotional pricing
2 advantages
1 disadvantage
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.
What is loss leader pricing
3 advantages
2 disadvantages
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.
What is psychological pricing
1 advantage
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
What is cost-plus pricing
2 advantages
2 disadvantages
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
What is discriminatory pricing
2 advantages
2 disadvantages
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
What are the 3 different channels of distribution
Manufacturer- wholesaler- retailer- customer
Manufacturer- retailer- customer
Manufacturer- customer (direct selling)
What are the 6 different things that could affect choice of channel of distribution
Include description
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.
What does it mean to sell via a wholesaler
The wholesaler buys in bulk from the manufacturer and divide them into smaller amounts to sell to retailers or customers
What does it mean to sell via a retailer
Some large retailers buy in bulk in similar quantities to a wholesaler
What is direct selling
When the product goes directly from the manufacturer to the consumer
3 advantages of selling via wholesaler
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.
3 disadvantages of selling via wholesaler
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
3 advantages of selling via retailer
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
3 disadvantages of selling via retailer
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
3 advantages of direct selling
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
2 disadvantages of direct selling
Increased costs due to advertising, storage and administration costs.
Time and cost incurred in organising product delivery
what is mail order
3 advantages
4 disadvantages
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
what is ecommerce
5 advantages
5 disadvantages
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
what is personal selling
2 advantages
2 disadvantages
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
what are tv shopping channels
3 advantages
3 disadantages
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
what is direct mail selling
2 advantages
2 disadvantages
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
what are the 8 methods of advertising
TV
Radio
Cinema
Apps
Direct mail
Internet
Magazines
Billboards
what are the 8 sales promotions
BOGOF
Free gifts and samples
New customer offers
Voucher codes
Flash sales
Loyalty cards
Free delivery
Like and share competitions
what is into the pipeline promotion
sales promotions offered by the manufacturer to encourage retailers to purchase products from them
what are out of the pipeline promotions
sales promotions offered by the retailer to encourage customers to purchase products from them
what are the 5 into the pipeline promotions
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
what are the 5 out of the pipeline promotions
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
what are public relations
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.
what is PR used for
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
what is a press conference
advantage and disadvantage
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
What is a sponsorship
Advantage
Disadvantage
Companies pay to sponsor and have their name associated with different events e.g Olympic Games
+mass coverage/ exposure
-extremely costly
What is a press release
Advantage
Disadvantage
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
What is a charitable donation
Advantage
Disadvantage
Letting the public know you donate or support a charity
+enhance social responsibility, encourages customers to purchase over competitors
-costly- shareholders may be unhappy
What is product merchandising
Advantage
Disadvantage
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
What are company visits
Advantage
Disadvantage
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
What is celebrity endorsement
Advantage
Disadvantage
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
What is product placement
Advantage
Disadvantage
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.
What is physical evidence extended marketing mix
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
People- extended marketing mix
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
Process- extended marketing mix
The experience the customer has while purchasing- should be simple and meet customer needs.
- Efficient delivery systems- tracking, quick, easy returns
- High quality communications live chats, FAQs,
- Quick complaints process- quick, efficient, effective
- Easy accessibility- for goods and services, ordering online
- Up to date technology- offers more efficient processes
Word in marketing
Create a letter of leaflets for promotions to customers
Prepare sales report for AGM
Press release
Database in marketing
Store customer data from loyalty systems to target sales promotions
Excel in marketing
Collate sales figures
Create graphs and charts to analyse sales performance and present to shareholders
PowerPoint in Marketing
Create a presentation for retailers or customers to promote products
Internet in marketing
Desk research- competitors prices , services, promotions
Field research- online surveys
Create a website for e-commerce and online selling
Advertise brand/ products
Email in marketing
Email customers/ potential customers from mailing lists with sales promotions, product news etc
Apps in marketing
Send notifications and promotions to customers via text
APPS downloaded to give customers on the go access to products and can be linked to notifications or text alerts
Social media in marketing
Create posts to advertise
Create like and share comps to increase followers and engagement
Advertise celebrity endorsement
Used to carry out market research
9 advantages of e-commerce
- Can offer a larger product range than in store
- Can include FAQs- help customers make informed choices
- Easy for customers to compare prices
- 24/7 access- increase sales
- Can reach worldwide markets if willing to ship
- Customers enjoy convenience of online access
- Can gather reviews- attract more sales
- Stock checking possible
- Delivered to door for customer
