Marketing Flashcards
1
Q
What is a market?
A
A market is any set of arrangements that allows buyers and
sellers to exchange goods and services (e.g., smartphone
market, car market, airline market).
2
Q
What is marketing? ( function)
A
Marketing is the management process involved in identifying, anticipating, and satisfying customers’ needs profitably.
3
Q
What is market size?
A
Market size is the total sales of all producers within one market, measured either by volume (number of units sold) or by value (total revenue of all companies).
4
Q
What is market share?
A
Market share is the percentage of all the sales within a market that are held by one company, measured by volume or value. A larger market share indicates a more influential company.
5
Q
What is market worth?
A
Market worth is the percentage of sales growth within the market as a whole, from one year to the next.
6
Q
What is the role of marketing?
A
The role of marketing is to identify, anticipate, and satisfy
customers’ needs profitably. Effective marketing can lead to
market growth and increased market share.
7
Q
What is product orientation?
A
Product orientation is when a business focuses on the production
process and the product itself, believing that a high-quality
product will satisfy customers and sell well.
8
Q
What is market orientation?
A
Market orientation is when a business focuses on continually
identifying, reviewing, and analyzing customers’ needs, then
producing a product that satisfies those needs.
9
Q
What is asset-led marketing?
A
Asset-led marketing is when a business bases its marketing
strategy on its strengths instead of purely on what the customers
want.
10
Q
What is the marketing mix?
A
The marketing mix (7Ps) refers to the elements of a firm’s
marketing strategy designed to meet the needs of its customers.
11
Q
What are the 7 elements that businesses need to pay attention to
when marketing?
A
The 7 elements are: 1. Product: Product Businesses need to
make sure that their product meets the needs of their customers.
This means businesses need to pay attention to a range of
features of the product such as size, shape, design, colour etc. 2.
Price: The pricing policy usually depends on the market at which
the business is aiming. Some businesses may decide to set their
price high because they believe that their customers perceive
that product as exclusive, rather than because the production
costs are high. 3. Promotion: There are many promotion methods
that businesses can use to communicate with their customers. 4.
Place: Place obviously does refer to the physical location of the
business and how that affects peoples purchasing habits, but it
also refers to the means of distribution of a product to the
customers since they must get to the right place at the right time.
5. People: This element refers more to services, meaning the
customers will judge the people i.e. employees that are providing
the service. 6. Process: Again, it refers more to services and it
involves mechanisms, activities and procedures involved in
delivering the service. 7. Physical Evidence: It refers more to
services, and it involves the appearance of the environment in
which the service is provided.
12
Q
What is Secondary market research?
A
Secondary market research means that simple collection of data
needs to be carried out. The data collected can be both internal
from within the business, e.g. previous market research reports,
sales figures, stock movements etc. and external from outside the
business, e.g. information about competitors, data from customer
services on received complaints etc.
13
Q
What is Primary market research?
A
Primary market research involves collecting primary data. This
data needs to be collected by the researcher since it was non-
existing before the primary research was conducted. Some
companies dont have the capacity to carry out primary research,
so they hire market research agencies, which are experts in
conducting such studies. There are many different methods of
collecting primary data, such as using questionnaires, organising
interviews or focus groups in order to obtain the information they
need.
14
Q
What are the advantages and disadvantages of Primary
research?
A
Advantages:
Relevant data can be collected
The business that collects the data is the only one with the
access to it
Disadvantages:
Expensive and time-consuming
The sample taken might not represent the views of the market
If the research method is flawed, the findings will be flawed as
well
15
Q
What are the advantages and disadvantages of Secondary
research?
A
Advantages:
Easy, quick and cheap
Several sources may be used
Disadvantages:
Historical data may be used
Data is not always in a convenient form
Data may be out of date and not relevant
Researchers must be aware of bias
16
Q
What is Random sampling?
A
Gives each member of the target population equal chances of
being chosen.
17
Q
What is Stratified sampling?
A
Also a random sampling method. However, before the samples
are drawn, the sample population is divided into groups called
strata based on the previous knowledge about the target
population. Once those groups are set, researchers choose
customers at random that fit in those strata
18
Q
What is Quota sampling?
A
Researchers divide the population into groups that share similar
characteristics e.g. age, gender and then have pre-set number of
people in each group they have to interview.
19
Q
What is Cluster sampling?
A
Involves separating the target population into clusters usually in
different geographic areas. A random sample is then taken from
each cluster.
20
Q
What is snowball sampling and when is it used?
A
Snowball sampling is used when firms are looking for specialists
in a particular field they want to employ. It is based on a pre-
existing network of these specialists that the firm approaches and
asks to work for them.
21
Q
Advantages of Random Sampling
A
Representative
22
Q
Disadvantages of Random Sampling
A
Time-consuming and costly. Assumes that all the members of the
target population are homogeneous
23
Q
Disadvantages of Stratified Sampling
A
Time-consuming and costly
24
Q
Advantages of Stratified Sampling
A
Representative. Each subgroup provide quality results
25
Advantages of Quota Sampling
Cheap and not time-consuming
26
Disadvantages of Quota Sampling
Not representative
27
Advantages of Cluster Sampling
Useful when results are needed quickly. Useful for results about
how the opinions vary geographically
28
Disadvantages of Cluster Sampling
Representativeness of the sample is assumed. Assumes that all
the members of the target population are homogeneous
29
Advantages of Snowball Sampling
Firms will get the results they are looking for
30
Disadvantages of Snowball Sampling
Not representative
31
What is Market segmentation?
A process of breaking down a market into sub-groups with similar
characteristics
32
Why would a business want to segment its market?
By identifying different market segments, businesses should be
able to understand its customers better. It can prevent products
being promoted to wrong people and customers may feel their
needs are being better targeted which could result in higher
customer loyalty, among other reasons.
33
How do businesses segment their market geographically?
By where customers live. Very useful for businesses that operate
in multicultural markets and see where buying patterns are
influenced by region.
34
How do businesses segment their market demographically?
By their gender, social class, age, income, ethnicity, religion.
35
How do businesses segment their market psychologically?
By their lifestyle and personality.
36
How do businesses segment their market behaviourally?
By knowing how they act - do they make repeat purchases, buy
on impulse or want high quality products?
37
What are the steps of Planning marketing strategy?
Identifying the market, Developing customer profiles, Evaluating
market segments, Selecting market segments to target,
Positioning for each target segment, Developing a marketing mix
for each target group
38
What is customer profiling?
The analysis of the characteristics of customers in the market or
market segment.
39
What is the Product Life Cycle (PLC) and what are its stages?
The Product Life Cycle (PLC) shows the different strategies in the
life of a product and the sales that can be expected each
stage. There are several stages in this cycle: Development,
Introduction, Growth, Maturity and Saturation, and Decline.
40
What are expansion strategies and why are they used?
Expansion strategies are used by businesses to extend the life
cycle of their products. This is because the product is most
profitable during the mature period. These strategies are
launched as soon as the product enters the saturation stage and
sales start declining. They can involve finding new markets for
existing products, developing a wider product range, and gearing
the product towards specific target markets.
41
What does market positioning mean and what does it involve?
The last step is market positioning, which means that the
business will need to position its product within the market
usually in terms of quality and price. As part of this process,
businesses will need to form a marketing mix for each segment
and market they targeted . This means, alter their product, pricing
strategy and place element of the marketing mix in order to
profitably satisfy customers needs.
42
According to the Ansoff Matrix, what are the 4 possible strategies
a firm could choose to grow?
Ansoff Matrix tells us that there are 4 possible strategies a firm
could choose in order to grow, increase sales, find new markets
and gain competitive advantage in their industry: Market
Penetration, Product Development, Diversification, and Market
Development.
43
How is market share calculated?
( firm’s sales)/(total sale in market)*100
44
What happens to cash flow before product launch?
Cash flow is negative as the business spends to develop the
product without any sales revenue.
45
What happens to cash flow at product launch (point A)?
Cash flow is likely negative or close to zero as the business
spends heavily on promotion and distribution, and revenue is still
low.
46
What happens to cash flow during the growth period (point B)?
Cash flow becomes positive as revenue exceeds spending due to
increased sales.
47
When is cash flow at its highest?
During the mature period, when revenue is the highest.
48
What happens to cash flow during the decline period?
Cash flow decreases along with sales.
49
What are the two factors considered in the BCG Matrix?
Market growth rate and market share of the product.
50
What are the four categories in the BCG Matrix?
Stars, cash cows, question marks, and dogs.
51
Describe 'Stars' in the BCG Matrix.
Products with high market share in a growing market; profitable
but require further investment.
52
What stage of the PLC are 'Stars' likely in?
Growth period.
53
Describe 'Cash Cows' in the BCG Matrix.
Products with high market share in a slow-growing market; highly
profitable with positive cash flow.
54
What strategy is employed for Cash Cows?
Extension strategy to maintain profitability.
55
What stage of the PLC are 'Cash Cows' likely in?
Mature period.
56
Describe 'Question Marks'/ ‘problem child’ in the BCG Matrix.
Products with low market share in a fast-growing market; require
a decision on whether to invest or withdraw.
57
What is the product Dogs in marketing?
Dogs These products have a low market share in a slow growing
market. This means that it is not likely that there will be an
increase in sale of the product. The cash flow at this point is
positive as not a lot is invested in a product. These products are
in the decline period of the PLC
58
What is a brand?
A brand a name, term, sign, symbol, design or any other feature
that allows consumers to identify the goods and services of a
business and to differentiate them from those of competitors
59
What is Manufacturer brands?
Manufacturer brands Brands created by the producer of goods
and services. e.g. Gillette razors or Samsung laptops
60
What is Own-label brands?
Own-label brands These are products which are manufactured
for wholesalers or retailers by other businesses, but the
wholesalers and retailers sell the product under their name. e.g.
Albert Heijn does not produce AH pasta or AH beans, but sells
them
61
What is Product individual branding?
Product individual branding Businesses can brand individual
products and give them individual brand names e.g. a large
number of washing powder brands sold by the same producer
Procter Gamble Ariel, Bold, Tide, etc.
62
What is Family branding?
Family branding is when a business has a brand name which
includes a number of different products. e.g. Mars chocolate bar
has its own energy drink as well
63
What is Company corporate branding?
Company corporate branding This is when a business name is
used as brand name. This is similar to the own-label brands, but
in this case the business that sells and produce the products
names the brand after the name of the company.
64
What is Cost-based pricing?
Cost-based pricing deciding on the price primarily based on the
costs of production.
65
What is Cost-plus pricing?
Cost-plus pricing Involves calculating the average cost of
production of a product and adding a MARK-UP for profit.
66
What is Market-oriented pricing?
Market-oriented pricing deciding on the price based upon an
analysis of the conditions in the market at which a product is
aimed. These pricing strategies are suited for market-oriented
businesses.
67
What is Penetration pricing?
Penetration pricing This is used by businesses trying to gain a
foothold in a market, either with new or established products. The
idea is to lower the price and thus encourage retailers and
customers to purchase the goods in larger quantities.
68
Who uses 'market skimming'?
Well established businesses or new businesses who are willing to
make losses in short run.
69
What are 'loss leader' products?
Products priced at very low levels in order to attract customers
lower than the average costs of production. The company thus
makes a loss on every product that is a loss leader. However,
business expect that the loss made on loss leaders will be more
than compensated by the additional profit from selling other
products.
70
When does 'price discrimination' pricing occur?
When a firm offers the same product at different prices when
consumers can be kept separate. It can be time based e.g. the
price of train ticket may depend on time of the day or market
based e.g. different prices for different market segments, like
when students can get a discount on laptops.
71
What is 'competition-based pricing'?
When prices charged by competitors are the major influence on
the price a business will charge for its product. It is used mostly
by businesses that face fierce competition.
72
What is 'going rate pricing' and 'price leadership'?
Occurs in markets where businesses are reluctant to set off a
price war by lowering the prices and are concerned about a falloff
in revenue if prices are raised. They examine competitors prices
and choose a price broadly in line with them. It also occurs that
one business dominates the market and acts like a price leader,
with other firms follow the pricing policy of that company.
73
What is the aim of 'destroyer predatory pricing'?
The aim is to eliminate opposition, by cutting prices for a period
of time long enough for the rivals to go out of business in many
countries it is forbidden by law.
74
What is 'promotion'?
Promotion the attempt to draw attention to a product or business
in order to gain new customers or to retain existing ones.
75
What is above-the-line promotion? What types are there?
Above-the-line promotion is promotion through independent
media such as TV and newspapers, allowing a business to reach
a wide audience easily. It's also called advertising, using images
or sounds to encourage purchases. Types include Television,
Newspaper, Radio, Posters and billboards, and Internet.
76
What is below-the-line promotion? What types are there?
Below-the-line promotion is any promotion that isn't advertising,
giving the business direct control to aim the message at known pre-selected consumers. Types include PR, Merchandising,
Sales promotion, Direct selling, Direct mailing, and Exhibitions
and trades.
77
What does 'Place' involve in marketing?
Place involves the physical location where a product can be
bought and its distribution channels, which is the route from
manufacturer to consumer, potentially involving intermediaries
like retailers, wholesalers, agents, and brokers.
78
How do businesses choose a particular distribution channel?
Businesses choose a distribution channel based on factors such
as costs, the level of control they want over distribution, and legal
factors.
79
What determines the advantages and disadvantages of different
distribution channels?
The length of the supply chain affects costs, with longer chains
potentially increasing the final cost to the consumer. Control is
another factor, as some manufacturers prefer to maintain careful
control over their distribution channels. Legal factors can also
influence how a product is distributed.
80
What are the two main types of e-commerce?
The two main types of e-commerce are B2B (business to
business) and B2C (business to consumers).
81
What are the benefits of e-commerce to firms?
E-commerce enables businesses to reach a global market,
eliminates the need to be physically close to customers, offers
longer opening hours which may increase sales, and results in a
great reduction in costs.
82
What are the costs of e-commerce to firms?
The costs of e-commerce to firms include more fierce competition and the increased importance of delivery speed.
83
What are the benefits of e-commerce to consumers?
E-commerce allows consumers to easily access goods and
services.
84
What are the costs of e-commerce to consumers?
he costs of e-commerce to consumers include the time-
consuming and frustrating nature of choosing from a huge
number of rival businesses, the need for a credit or debit card to
make payments, and the frustration of waiting for delivery.
85
How does e-commerce affect the marketing mix (Price)?
Businesses must ensure their product is priced competitively in
relation to their e-commerce rivals.
86
How does e-commerce affect the marketing mix (Promotion)?
Promotion is focused on using the internet, which is easier and
cheaper for businesses.
87
How does e-commerce affect the marketing mix (Product)?
It is important that businesses establish a clear USP (Unique
Selling Proposition).
88
How does e-commerce affect the marketing mix (Place)?
E-commerce businesses often have greater freedom of choice
over where they locate their businesses
89
What are commercial and social marketing?
Commercial marketing uses marketing strategies to meet
customer needs and wants in a profitable way, with ethics playing
a small role. Social marketing seeks to influence social behavior
Marketing Fundamentals
- Barriers to entry (difficulty for new producers to enter the market)
to benefit the target audience and so
90
What are the differences between commercial and social marketing in terms of purpose, benefits, and main users?
Commercial marketing is for goods and services for profit,
benefiting the business and customers. Social marketing is for
social change, benefiting the community. Commercial marketing
is used by private sector businesses, while social marketing is
used by government and NPOs.
91
92
What does DAMAS stand for in the context of market
segmentation
DAMAS stands for: D - Differentiatial, A - Actionable, M -
Measurable, A - Accessible, S - Substantial
93
Describe niche marketing.
Niche marketing targets a specific and well-defined market
segment, such as expensive luxury goods or horse riding
accessories.
94
What are the advantages and disadvantages of niche marketing?
Advantages: Better marketing focus, less competition, higher
prices, higher profits, high specialization.
Disadvantages: Limits number of potential customers, few
chances to exploit economies of scale, good ones attract big
competitors.
95
What is mass marketing?
Mass Marketing refers to undifferentiated marketing, a strategy
that ignores targeting individual market segments. Examples
include Coca-Cola and Lenovo.
96
What are the advantages and disadvantages of mass marketing?
Advantages: Huge potential economies of scale, no need for
modification for different segments, establish a bigger customer
base.
Disadvantages: High entry barriers for mass production, fierce
competition, lack of focus.
97
Explain product position maps.
A product position map is a visual tool that reveals customer perceptions of a product or brand in relation to others in the
market. It helps identify gaps and refine marketing strategies.
98
What are the categories of products based on price and quality in
a position map?
Premium products (high quality, high price), Economy products
(low quality, appropriate prices), Bargain products (high quality,
low prices), Cowboy products (poor quality, high prices).
99
What are some strategies to achieve market positioning success?
Cost-leadership doesn't go well with high quality, differentiation
from competitors, focus on a particular market segment.
100
What is a Unique Selling Point (USP)?
A unique selling point or unique selling proposition is any aspect
of a business, product or brand that makes it stand out from
those offered by competitors. It helps them distinguish
themselves.
101
What is differentiation?
Differentiation is the act of distinguishing a business or its
products from rivals in the industry. They create the perception
that a firm's product is different so its add value compared to
competitors, helping a business withstand competition.
102
What are the 5 steps of market research?
Research Brief, Plan of Work, Collection of Data, Analysis and
Evaluation, Presentation of Findings
103
What is Market research?
Market research refers to the marketing activities designed to
discover the opinions, beliefs and preferences of potential and
existing customers
104
What are surveys?
Surveys - document that contains a series of questions used to
collect data for a specific purpose. Several types - Self completed
- by a sample of people, helps identify problems, trends,
suggestions for improvement. - Personal - face-to-face, can
address extra questions from questionnaire - Telephone - like
personal
105
What are the characteristics of different data collection methods
like phone surveys, online surveys, and postal surveys?
Phones: Covers more geographic space.
Online: Cheap, data can be collated and analyzed by computer
directly.
Postal surveys: By mail. Should avoid bias and jargon, include
both closed and open-ended questions, be tried and tested, and
be relevant
106
What are the advantages and disadvantages of interviews?
Advantages: Relevant, up-to-date, confidential and unique.
Disadvantages: Time-consuming, costly, possible validity issues.
107
What are the characteristics of interviews, focus groups,
consumer panels and observations?
Interviews: One-to-one discussions to investigate personal
circumstances and opinions. Provide in-depth opinions but are
often non-quantifiable, time-consuming, and biased.
Focus groups: Small discussion groups to gain insight into
attitudes and behavior. Made up of participants of a similar
consumer profile. Detailed questions can be asked, and people
are more likely to engage.
Consumer panels: Used regularly for research; a variation of
focus groups.
Observations: Watching how people behave and respond in
different situations. Can be done under controlled conditions or
real-life situations.
108
What are the internal and external sources of secondary data?
Internal: Existing research data, past promotional data, sales
records, stock records, financial records, customer database.
External: Market analysis, academic journals, government
publications, media articles.
109
What are the 5Ds of ethical considerations in market research?
Damage: Protect people in their samples.
Deceitful: Trustworthy in obtaining usable data.
Deceptive: Avoid deceptive and misleading methods to access
and gather data.
Disclosure: Avoid potential invasion of privacy and breach of
confidentiality.
Detachment: Unbiased.
110
What are the main ethical considerations of market research?
Market research needs to be systematic, consistent, and unbiased
111
What is the difference between qualitative and quantitative
market research, and where does the data mainly come from?
Qualitative market research gathers non-numerical opinions to
understand customer behavior, while quantitative market
research collects factual, measurable information. Qualitative
data is mainly from primary research, and quantitative data from
secondary research.
112
In market research, what are the 'population' and a 'sample,' and
what should be considered for effective sampling?
The population is all potential customers in a market, while a
sample is a selected portion used for primary research. Effective
sampling considers who to ask, what to ask, and cost justification.
113
What are the different types of probability and non-probability
sampling methods?
Probability sampling includes simple random, systematic random,
stratified, and cluster sampling. Non-probability sampling includes
quota, convenience, and snowballing sampling.
114
What are non-sampling and sampling errors in data collection
Non-sampling errors are caused by human errors. Sampling
errors are due to small sample size, unrepresentative samples,
wrong sampling methods, or bias.
115
How can data be presented, and what are the limitations of data
presentation?
Data can be presented in bar charts, pie charts, line graphs, and
histograms. Limitations include inaccuracy, unreliability due to
bias, and high costs for good market research.
116
What are 10 things to change a product?
The 10 things to change a product are: Quality, Features, Optional extras, Style, Brand name & logo, Packaging, Size, After-
sales services, Warranties and Returns
117
What is a product, and what is the product life cycle (PLC)?
A product is any good or service that satisfies customer needs.
The PLC is the process from design to withdrawal, with stages
including research, launch, growth, maturity, and decline.
118
What does the research and development (R&D) stage of a
product's life cycle involve?
The research and development (R&D) stage of a product's life
cycle involves designing
119
What is the purpose of producing a prototype along with market
research?
To assess the potential success of a product.
120
What is test marketing?
Trialling a new product with a sample of customers to minimize
costs and embarrassment if the product is unsuccessful.
121
What are some potential drawbacks of test marketing?
It can be expensive, and competitors might find out about the
product before its launch.
122
What is the launch stage characterized by?
Careful marketing planning, relatively low sales, and high costs
due to publicity, promotion, and distribution.
123
What characterizes the growth stage?
Increasing sales revenue, wider channels of distribution, and the
influx of early adopters. Profits may materialize, but competitors
are attracted to the industry.
124
What characterizes the maturity stage?
Sales revenue continues to rise but at a much lower rate. There's
cash flow and economies of scale. Saturation can occur with too
many competitors.
125
What is the focus of the marketing mix during the maturity stage?
Promotion to emphasize brand loyalty and repeat purchases.
126
What characterizes the decline stage?
Falling sales and profit, less favorable cash flow, lower customer demand, and cuts in investment and promotional expenditure.
127
What are some strategies for prolonging the product life cycle?
Product changes (e.g., limited editions, repackaging, new
models), price reductions, changes in distribution patterns, and
new promotional campaigns
128
What are the strategies to gain a higher share for cash cows?
Cash cows have high market share in a low growth market and
generate superb net cash flow. Extension strategies are used to
prolong their high earning potential due to the risk of becoming
dogs.
129
What strategies do businesses use for dogs in a product portfolio?
Dogs have low market share in a low growth market. Businesses
may use Product Extension Strategies (PES) or try to dispose of
the dogs, as these products don't generate much cash.
130
Why is a diverse product portfolio important for a firm's cash flow?
A diverse product portfolio is important because selling to a
single market limits revenue. It also helps spread risks, as a
decline in sales for one product may be offset by favorable sales
of others.
131
What are the advantages of branding for a firm?
Branding enables the business to earn more profits. It provides
price advantages, recognition and loyalty, and distribution
advantages.
132
What are the key aspects of branding?
Key aspects include brand awareness (recognition by potential
customers), brand development (strengthening the brand's name
and image), brand loyalty (customers repeatedly buying the same
brand), and brand value (premium customers are willing to pay).
133
What is brand switching, and how do businesses prevent it?
Brand switching is when consumers turn to alternative brands,
often because the original brand has lost its appeal. Businesses
often use customer loyalty schemes to prevent brand switching.
134
What role does brand reputation play in customer willingness to
pay?
Customers are willing to pay more for a reputable brand. Brand
awareness, development, and loyalty all have a role in improving
a firm's brand value. This leads to higher market share, premium
prices, and high entry barriers to the market for new firms.
135
What is packaging and what functions does it serve?
Packaging refers to the ways in which a product is presented to
the consumer and serves as a form of product differentiation. Its
functions include making a strong first impression, protecting the
contents, providing valuable information through labeling, aiding
distribution with standard sizes and shapes, encouraging impulse
buying with eye-catching designs, and prominently featuring
branding to create brand image.
136
What is e-commerce and what are its common features?
E-commerce is the trading of goods and services via the internet,
electronic systems, and computer networks. Common features
include global reach, 24/7 accessibility, detailed product
information, consumer reviews, impersonal interaction, and lower
barriers to entry compared to traditional retail.
137
What are some disadvantages of international e-commerce?
It is volatile as it is prone to hackers and breakdowns. It can
cause major problems for a country's currency flows. A shift to commerce from traditional methods of retailing may result in job
losses.
138
What are the costs of e-commerce?
Costs of e-commerce include high set-up costs, credit card.
finance charges, fraudulent trade, spam and unethical marketing
opportunities, unsuitability for some businesses and customers, reliance on advanced technology, and the challenge of standing out among numerous web pages.
139
What are the benefits of e-commerce?
Benefits of e-commerce include another source of revenue,
another channel of distribution, greater flexibility to respond to
competitors, reduced packaging, lower overheads, and increased
customer choice and convenience
