Marketing Flashcards
Describe marketing
Marketing involves trying to meet the needs and wants of customers.
A business does this by finding out what the customers want and providing this at a price which will make the business a profit.
Describe the role of marketing
Identify products/services currently in demand
Anticipate what products/services will be in demand in the future
To monitor changes and trends
Raise awareness of products/services and the business image
To encourage new customers to purchase products
Effective marketing can result in market growth, increasing market share and ultimately becoming market leader
Why is marketing important?
It can attract new customers
It can give the business an opportunity to enter new markets and grow
It can increase the amount of profit a business can make
It can lead to increased market share
What is market research?
The methods used by businesses to find out what customers need and want.
It involves gathering, recording and analysing information about a market.
Describe internal desk research
Examining customer records e.g. Tesco Clubcard
Analysing customer complaints
Studying past trends in sales figures
Analysing the final accounts
What are the different methods of desk research?
Internal
External
Describe external desk research
Competitors websites
Government statistics e.g. census
Internet
Newspapers
What are the advantages of desk research?
There is a wide variety of sources available as different information has been published by different businesses
Cost effective as it is cheaper to gather than field research
Less time consuming and easy to obtain as the information already exists
What are the disadvantages of desk research?
It is not as reliable as field research as it was gathered for another purpose
May be out of date
May contain bias
Information also available to competitors
Give 6 methods of field research
Online Surveys
EPOS
Hall Test
Focus Groups
Loyalty Cards
Social Media
Describe a postal survey
A postal survey is when a list of questions is sent to people through the post. They will be asked to complete the survey and to send it back to the business.
What are the advantages of postal surveys?
It is relatively cheap to send the survey to large numbers of people spread over a wide geographical area
People can complete the survey at their own pace at a time that suits them.
What are the advantages of observations?
Facts and figures (quantitative information) are gathered, which are easier to analyse than qualitative information
People being observed might not be aware so should act naturally
What are the disadvantages of postal surveys?
People need to open the survey sent to them in the post and send it back; they might not do this
Can take time to get the information back
There is no opportunity for the respondent to clarify anything they do not understand
The survey must be designed carefully so that it is not misinterpreted.
Describe observations
An observation involves watching something and recording what happens. The observer might have to count how many times something happens, or someone does something, or what someone’s reaction is to a situation.
What are the disadvantages of observations?
Those being observed are not usually asked for their opinion or to give an explanation as to why they did or did not do something
There are privacy and ethical issues to consider when observing people
Describe EPOS
EPOS systems gather information when consumers are making a purchase at the checkout.
What are the advantages of EPOS?
Large quantities of information can be gathered
The information gathered is factual and not just opinions
What are the disadvantages of EPOS?
It can be expensive to purchase an EPOS system – especially for a small business
No opportunity to gain the opinion of the customer
Describe loyalty cards
Customers present the card when purchasing goods and services and receive a reward in return e.g. Tesco Clubcard.
What are the advantages of loyalty cards?
Up to date information on consumer buying habits is obtained
Can encourage customer loyalty as there is an incentive to make repeat purchases
What are the disadvantages of loyalty cards?
Expensive to set up and run
Need to provide discounts or other incentives to encourage customers to keep using them.
What are the advantages of field research?
The information is up to date
The information has been gathered for a specific purpose and is therefore relevant
Not available to competitors
What are the uses of market research?
Identifies how much the customer is willing to pay
Target market can be identified so the most appropriate methods of promotion are used
Can gain a competitive advantage
Reduces the risk of failure
What are the disadvantages of field research?
Collecting the information is expensive as staff need to be trained
It is time consuming to gather
Data must be analysed once gathered
What are the 4 key parts of the marketing mix
Product
Price
Place
Promotion
Why does product tend to be the most important element?
Must meet customers wants or they will not buy it
Determines what the PRICE will be
Determines how it is PROMOTED
Determines where it is sold - PLACE
Describe generating the idea
The first step is to come up with the idea for the product.
This can come from within the business or from market research to find out what the consumer wants.
What things ensure a product stands out?
Physical appearance e.g. size, shape, colour
Taste e.g. texture, flavour
Quality - value for money
Packaging – eye catching, environmentally friendly
Unique Selling Point (USP)
Give the steps to developing a product
Generate the idea
Analyse the idea
Produce the prototype
Test the product
Alter the product
Produce the product
Describe analysing the idea
At this step the business will decide whether the product can be made.
This may not be possible for a number of reasons e.g. lack of finance, lack of up to date technology, problems with design and production (internal factors).
Describe producing the prototype
The business will create an example of the product to see what it will look like, the size and the design to see if it works and is possible to produce.
Describe testing the product
Use test marketing or a focus group to ask the consumers views of the product.
Collect feedback.
Describe altering the product
Make changes based on the market research to ensure the product is the best is can be.
This will reduce the risk of failure
Describe producing the product
Start production of the product.
Advertise and promote the product so that consumers are aware that it exists.
What are the benefits of branding?
Creates a unique identity and is instantly recognisable to customers
Helps to encourage repeat custom
New products are trusted by consumers - reduces the risk of failure
Gives an impression of quality and reliability
A premium price can be charged
The brand name can become valuable
Describe branding
Brands are products or ranges of products which have a unique, easily recognised character
It can be a word, symbol or slogan that no-one else can use
Brands are perceived to be better quality than other similar products
Customers will pay a premium price for a branded item, partly due to high packaging and advertising costs.
What are the costs of branding?
Establishing a brand is expensive and time consuming. To protect the brand name legal costs will be incurred
Bad publicity for one product in the brand can negatively affect the whole brand name
Some brands are likely to be copied, fake versions can appear on the market for cheaper
Brands must invest in research and development and advertising to remain competitive
Describe own branding
When a business produces and sells their own version of a product.
Usually, the brand is the name of the retailer
Retails do not normally manufacture their own products e.g. McVities manufacture and package biscuits for M&S
What are the advantages of own branding
Usually cheaper than branded products therefore popular with customers.
Gives customers more choice
Very little advertising required as own brand is well known e.g. Tesco
What are the disadvantages of own branding
Sometimes seen as poorer quality compared to other brands
Can be viewed as a copy or imitation of a brand.
What are benefits of packaging?
Makes the brand recognisable and identifies the product from their competitors – advertises the brand
Attracts consumers and persuades them to try a product
Protects the product and can keep it fresh e.g. food
Informs consumer about the product e.g. ingredients
Describe packaging
Packaging is the materials used to protect and promote goods.
Packaging is designed to capture a customer’s attention and it can directly effect whether they buy the product or not.
Packaging has to fulfil a number of important functions, including:
communicating the brand and its benefits
protecting the product from damage
preventing leakage of the contents
presenting government-required warning and information labels.
It is almost as important as the product itself as it has to represent the brand and the product!
What are the costs of packaging?
Can be costly for the business to make packaging if it wants to give an impression of a high quality image
Needs to be updated to stay in line with Government legislation
More pressure to reduce plastic use and easy to recycle materials to limit damage to the environment
Product packaging can be misleading which can give the business a bad reputation
Packaging can be copied easily
What are some pricing strategies?
Market Price
High Price (Premium Price)
Penetration Pricing
Price Skimming
Promotional Pricing
Describe low price
A business may decide to charge a price lower than those of competitors to increase sales. It is usually used in a marketplace with little brand loyalty and competition is high. Can be used to attract a different target market e.g. value ranges in supermarkets.
