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May be out of date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.
Describe market price
The price is set at the market rate which means that a business charges a similar price to competitors. This happens in markets where there are a few large dominant companies e.g. petrol. If one petrol retailer reduces their price competitors will match it or better it almost immediately.
Instead of competing on price these businesses tend to compete using other incentives such as air miles, nectar points or free gifts.
Describe penetration pricing
This is used by a business that is entering a market where competitors are already selling similar products. Prices will be set lower than competitors to tempt customers to choose to buy the new product rather than the competitors. Once the popularity of the product increases the price will increase in line with competitors’ prices.
Describe high (premium) pricing
A business can charge a high or premium price for their product if they are seen as being better than their rivals in meeting the needs of the target market e.g. perfumes and designer clothes.
Other reasons for charging a high price would be a well-established brand name and reputation, lack of competition in the market or a USP (Unique Selling Point).
In the short term a high price can be charged for innovative products when they are first introduced to the market.
Describe price skimming
A business will use this strategy when they are the first to launch a new product onto the market. The price is high which allows the business to make a large initial profit and recoup some of the costs of developing the new product. As competitors enter the market the price will gradually fall.
Describe promotional pricing
This is used to boost sales in the short term by lowering the price of the product. It can also be employed to create interest in a new product e.g. BOGOF, 20% off flash sale.
Supermarkets use promotional pricing for some of their products. They will advertise the low price for these products attracting customers into the store in the hope that they will buy a whole range of other goods at the same time.
Describe destroyer pricing
This is used by a business who wants to eliminate the competition from the market. Prices are lowered to force competition to lower their prices – hopefully forcing them out of the market. When that happens, prices are increased to their original level.
This strategy is used by large organisations who can afford to make a loss in the short term until the competition has been destroyed.
Describe phycological pricing
A business will set prices to make the customer believe that the product is cheaper than it is, for example 99p instead of £1.00 or £99.99 instead of £100.00.
Describe cost-plus pricing
A common way to make pricing decisions is to calculate how much it costs to make a product or complete a particular job and then add on a percentage for profit. This is known as the MARK UP.
What factors should you consider when choosing a place?
Staffing
Competition
Location of Customers
Parking Facilities
Infrastructure
Finance Available
Describe location of customers
Businesses want a location where a customer base already exists e.g. a busy shopping mall
Customer will not travel too far – market research will help identify where the customers are
Describe environmental impact
Businesses need to think about the environmental impact – they do not want to be ripping down forests in order to build premises
Describe availability of premises
Certain size of shop may be required
Certain facilities may be needed e.g. large stockroom, kitchen area
Describe infrastructure
Transportation links are required so customer, employees and suppliers can get to the business
Describe availability of employees
A certain number of staff might be needed – an area with high unemployment levels would benefit a business
Employees with suitable skills may be required e.g. tradesmen
Where can products be sold?
E-commerce
High Street Shop
Shopping Centre
Catalogues
Teleshopping
Market
Describe celebrity endorsement
Celebrity endorsement advertising is defined as a well-known person using his or her fame to help promote a product or service
What are the disadvantages of billboards?
May be ignored by passers-by
Can only include limited information
No demonstration can be made
Give 3 methods of advertising
Cinema
TV
Billboards
What are the advantages of billboards?
Usually in busy locations
Can be cheaper than other forms of advertising
Potential customers will see the advert repeatedly over a long period
What are the disadvantages of celebrity endorsement?
It can cost large amounts of money to get and retain the celebrity
If the celebrity gains bad publicity the product also tarnished
Describe billboards
Billboard advertising is the process of using a large-scale print advertisement to promote a product/service
Describe technology in marketing
Technology plays a major role in marketing. This is used in market research, promotions, and sales through online surveys, EPOS, social media adverts, and e-commerce
What are the advantages of celebrity endorsement?
Consumers buy the product in an attempt to be the same as the celebrity
Assumed the products will be of a high quality as celebrities are using them
Exclusive image - higher prices can be charged
Brand loyalty can be created
Give 6 uses of technology in marketing
Social Media
Apps
Text Alerts
E-mail
e-commerce
Online Surveys
Describe e-commerce/s-commerce and technology in marketing
Can sell worldwide means the business will be better known
Increased sales, leading to increased profit
Savings on expensive showrooms/stores
Business is open 24/7
Describe databases and technology in marketing
Databases are used by the marketing department to store highly detailed information on customers purchases. Databases allow departments to easily access these records so they can target particular groups of society and see which products are commonly bought together.
What are the disadvantages of e-commerce for businesses?
Business is in competition with lots of others
Designing and keeping the website up-to-date is expensive and requires specialists
Not all the businesses target customers have access to the internet.
Give disadvantages of cinema advertising
The message is short lived
Limited audience
Expensive to produce good quality adverts
What are the advantages of e-commerce for customers?
Customers have a wider range of goods to choose from
They can ‘shop around’ and get the best deal
Internet prices are often lower than in shops
Give advantages of television
Exposure to a national audience targeting all market segments/ socio economic groups
Product can be demonstrated
Regular adverts can be very persuasive
Describe advertising
Producing paid material to inform public of a product or service.
What are the disadvantages of e-commerce for customers?
Customers need to own or have access to a computer and be on-line and know how to use the Internet.
Delivery problems
Inconvenience of returning unwanted goods.
Time it takes for refund to be put back into your account
Describe cinema advertising
Cinema advertising is a form of advertising used in cinema to promote products or services. The presence of the advertisement takes place before the movie for around 20-30 minutes.
Describe television advertising
A television advertisement is a span of television programming produced and paid for by an organization. It conveys a message promoting, and aiming to market, a product or service.
Describe sales promotions
A short-term marketing strategy which aims to increase sales of a particular product or a range of products.
Describe loyalty card promotions
The more that a customer spends in a shop, the more points are added to their loyalty card. These points can then be converted into some sort of reward, for example a discount on other products.
Describe free samples
Many food companies will offer free samples as a way to let potential customers test a product
Describe free gifts
Often a business will encourage customers to buy by offering a free gift with its product.
Describe point of sales displays
Point of sale displays are to be found at the checkout. The point of sale display is most commonly designed to attract the customer to products that are new
Describe special offers
Special offers are short-term pricing strategies that businesses, especially shops, will adopt to encourage customers to buy from them.
Describe BOGOF
A commonly used special offer. This deal is used to offer customers extra value and may encourage them to buy more or to choose one business or product over another.
Describe discounts
By offering products at a reduced price for a set period of time, a business can offer customers better value
Describe email in ICT
Customers can agree to be added to a mailing list and they will be e-mailed with special offers, details of new products and other promotional materials.
Describe QR Codes in ICT
When a customer scans a QR code it will take them directly to a company website. They are often shown on promotional advertising billboards and magazines. It enables the customer to access the goods quickly and easily. This could increase sales.
Describe social media in ICT
Using platforms such as Twitter/Instagram/Facebook/ Snapchat which allows quick interactions with customers. Customers follow businesses they like to see products on sale and can see updates on stock levels. Sharing/ “like”ing of information increases the exposure of the business and celebrities can tag businesses in posts. Easy to run competitions which boosts publicity.
Describe apps in ICT
With the growth in mobile technology many businesses have launched Apps to give customers easier access to products and services when they are on the move
Market segments -
The market is split up into different sections depending on a
number of factors like age, gender, lifestyle, location, hobbies etc.
Describe databases in ICT
These are used to keep customer records and can be easily searched to allow the business to target marketing materials to particular groups of customers e.g. student discount
Describe data publishing in ICT
This software package can be used to design eye catching marketing materials to persuade customers to buy products/services
Market research - Primary:
Primary - Information gathered specifically for the business
itself, includes surveys, interviews, questionnaires, loyalty cards.
Market research - field
Field - goes outside the business to get information -
Advantages: are up to date, not
available to competition, exactly what you need.
Disadvantages: are expensive and timeconsuming.
Market research - secondary:
Secondary - information that already exists like the internet, newspapers, magazines,
Desk research. Advantages - easy to gather and not expensive. Disadvantages - out of
date, available to the competition as well, may not be accurate.
Questionnaire -
Customers are asked a series of questions about their view of the
product and their personal details
Interviews -
More in-depth than a questionnaire with the customers providing detailed
answers.
Telephone survey -
A questionnaire completed over the phone, cheaper than face to
face but more difficult to get customers to answer.
Postal survey -
questionnaires sent to customers through the post, really difficult to
get them to complete it.
Focus groups -
Customers spend a significant amount of time answers questions and
giving their opinions on the product.
Consumer panels
Used for specialist products eg doctors testing medical equipment, where a normal sample would not be appropriate.
Hall test -
Consumers test products like food and provide detailed feedback
Observation
watching the behaviour of customers while using the product/service
Launch/introduction
Sales slow but growing, advertising cost is high
Growth
Consumers becoming more aware, sales are growing, advertising cost still high.
Maturity -
Sales are at their peak, product is widely known, advertising costs now
lower.
Decline -
Sales falling rapidly, better alternatives now available, little advertising cost
Extension strategies -
When the product is in decline the company can either stop
making it or try to extend it by redesigning it or increasing advertising.
What are the points in the product life cycle
Launch/Intro, Growth, Maturity, Decline, Extension Strategies
Long term pricing strategies
Low price - increased sales, best where there is little brand loyalty.
High/premium pricing - used where image is important, charge higher prices, little direct competition.
Short term pricing strategies
Skimming - high price at the start then lowered.
Penetration - low price at the start to attract customers in a fierce market then increase the price.
Ethical marketing -
Many organisations sell themselves as ethical and environmentally friendly to reduce carbon footprint and impress customers.
Advertising Standards Authority -
They protect customers from misleading adverts, causing harm and offence, harmful products aimed a children.
