Marketing Flashcards
What is a market?
-a market occurs when there are buyers and sellers
What is marketing?
- marketing function provides the link between the customers and the business
-identify, anticipate and satisfy customers needs and wants
-maintain customer relationship and inspire loyalty
What is relationship marketing?
-the company seeks to build long term relationships with customers by providing consistent satisfaction.It focuses on customer retention rather than one off sales
What is the marketing process?
-set marketing objectives
-gather marketing data
-analyse data
-select a plan
-implement plan
-review the effects
-repeat
What are marketing objectives?
-the marketing targets
-SMART
-help to achieve the firms corporate objectives
How important are marketing objectives?
-more competitive markets because of globalisation and the internet therefore understanding customers and creating trusted relationships are vital
What is a market orientated business?
- a market orientated business is one where the customer is placed at the heart of everything the organisation does. Everyone in the business thinks about decisions from the perspective of the customer
What are some types of marketing objectives?
-sales volume targets and sales value targets are the most likely
-sales growth
-market growth
-market share
-brand loyalty
-product differentiation
What is sales volume?
-sales volume is the volume of sales measured in terms of units sold e.g sales of 5 million cartons of drink
What is sales value?
-sales value is the value of sales measured in terms of how much is spent on a product e.g sales of £30,000
What is the market size by volume?
Market size by volume= total units of sales of all the firms in a given market
What is market size by value?
Market size by value= multiplying the number of units sold by the selling price
What is sales growth?
Sales growth= the percentage change in sales volume or value over a given period
Change in sales/ existing sales *100
If the growth rate is negative sales are falling
What is market share?
-market share measures the sales of one business as a percentage of total sales in the market
-sales of firm A/ total market size*100
What is market share by volume?
Volume of sales of firm A/ total volume of sales in the market*100
What is market share by value?
Value of firm A/ total value of the market *100
Value=units sold times selling price
What is market growth?
Market growth measure the change in the size of a market over time.
-found by dividing the change in size of the market by the old size
(New market size-old market size)/ old market size* 100
What are index numbers?
-index numbers show percentage changes in data
-they have a base pint of 100 and show how data has changed relative to that point
What are business ethics?
Business ethics are morals/ values which help a business decide which actions are right or wrong
What are some examples of ethical considerations?
-should you advertise to children- pester power?
-fast terms and conditions?
-should we produce/ promote harmful products e.g alcohol?
-should we charge a high price for a new medical drug because there is no competition?
-should a sweet shop be located near a school?
What is meant by marketing research?
Market research involves gathering and analysing data to help support the implementation of a new market strategy
What is the purpose of marketing research?
Market research helps you to understand key factors to help you make a decision for entering a new market or expanding your own such as:
-dimensions of the market
-competitor strategies
-needs,wants and expectations of customers
-market segments
-can see your existing position in the market
-can help you fine market objectives
-can help you assess how successful your previous marketing decisions were
One purpose of market research is the understand the customer. What marketing research might provide an insight into?
-how much a customer is willing to pay
-customer needs and wants
-wether customers are ethical or not
-where the majority of customers purchase the product e.g online or in store
-what influences their decision to buy- price? Quality?
-general customer income
-purchasing behaviour
-who buys the product
-when are they buying it ?
-who do they ask for information before buying?
What is meant by competitiveness and how does conducting market research help the business to be more competitive?
Competitiveness referred to a business’s ability to outperform its rivals and offer them a better value for money relative to competitors.
Conducting market research helps a business to be more competitive by:
-understanding customer preferences- research helps identify what customers what and need therefore by filling these you draw customers to your business over rivals
-they learn how to promote
-what features do customers want?
-analysing competitors by studying their strategies, a business can learn from successes and failures. This enables the business to utilise their successes into their business and solve problems which cause other businesses failure to therefore draw customers to you
-identifying market gaps- research helps find areas where competitors are not meeting customer needs, allowing the business to fill those gaps
What is primary research?
Primary research is data collected first hand for a specific purpose and is gathered for the first time
What are examples of primary research?
-interviews (telephone or face to face)
-surveys
-questionnaires (online or mail)
-focus groups
-visits to competitors locations
What are the pros and cons of conducting primary research?
Positives:
-directly focused to the research objectives
-kept private
-more detailed incites
-up to date
Negatives:
-time consuming and costly to acquire
-risk of survey bias
-sampling may not be representative
What is secondary research?
-secondary research is data that already exists and was conducted for a different purpose
What are examples of secondary data?
-published market research reports
-internal transactional data
-Google official statistics (ONS)
-trade associations
-media reports
-competitor material
-annual census
What are the pros and cons of conducting secondary research?
Positives:
-often cheap and easy to obtain
-good source of market incite
-quick to access and use
-often based on large samples
Negatives:
-can quickly become out of date
-not tailored to the businesses needs
-specialist reports often quite expensive
-could be biased
Why is it important to conduct both primary and secondary research?
-using both helps to reduce costs from only using primary research but also helps reduce bias and get a wider range of data. Incorporating secondary research also helps to save time
Which research should be done first primary or secondary?
-Secondary research should be done first as it’s cheap and readily available and then you can use primary research to fill the gaps in data because if there is already data that is in date and accessible then it saves time to use that rather than primary data.
What is meant to qualitative data?
-qualitative data is research based on numerical data often done by questionnaires
What is meant by quantitative data?
-quantitative data is research based on views and opinions often done through discussion groups
Why is it important to do both qualitative and quantitative data?
-it is important to do quantitative and qualitative data so that you know not only how many people like a feature but also why they like that feature. Qualitative data raises issues that can be looked at in more detail with quantitative data and vice versa
What is random sampling?
Random sampling is where every member of the population has an equal chance of selection
-examples: selecting names randomly from a list on a data base or stopping every 10th person in the street
What are the advantages and disadvantages of random sampling?
Advantages:
-simple to design
-a random sample is relatively quick to survey, giving quick results
-lack of bias
-it is a useful method if the firm is unaware of the type of customer it will/ does attract as this method will survey a range of people
Disadvantages:
-it assumes all people are equally important, so it is less useful if the product is targeted at a specific market segment
-a large Sample is usually required, meaning it can be expensive
What is stratified sampling?
-stratified sampling is where the population is divided into subgroups( or strata) based on specific characteristics, such as age, income or gender. Random samples are then taken from each subgroup, giving everyone in the group and equal chance of selection
-when stratifying, researchers tend to make sure that the proportions from each strata represent the population as a whole
What are the advantages and disadvantages of stratified sampling?
Advantages:
-it ensure representation from all relevant subgroups
-it should provide results that are suited to the business needs as the people surveyed can match the background of the target market
-if buying behaviour is very different between different types of consumer, this method allows this business to examine this
-lack of bias in selection
Disadvantage:
-time consuming: it requires detailed knowledge of the population structure
What is quota sampling?
-quota sampling is a sampling technique where specific quotas( numbers) or proportions are selected from each strata
-researchers are given a number of how many to sample from each strata
-this selection is NOT random- researchers choose who to sample
What are the advantages and disadvantages of quota sampling?
Advantages:
-it ensures representation from all relevant subgroups
-it should provide results that are suited to the business needs as the people surveyed can match the background of the target market. This means less people may need to be surveyed than with random sampling so might be cheaper?
-if buying behaviour is very different between types of consumer, this method allows the business to examine this
Disadvantages:
-it is more time consuming than random sampling
-it is not random and so there may be a greater risk of bias in the selection process e.g the interviewer may choose 100 females aged 20-30 who all live in the same geographical area as they are easier to research
What does the value of sampling depend on?
-how the sample was selected e.g only asking your friends or asking men when women also buy the product. The sample must represent the target population
-how the sample is conducted e.g asking leading questions
-the sample size e.g the smaller the sample the less the result will reflect the target market
Why does marketing research not guarantee success?
-changes in market e.g new competitor or new technology meaning the information is out of date
-secondary research may be in the wrong format
-samples may not reflect the target population
-lack of finance to conduct thorough research
-decisions following the research could still be poor
How does market research interact with ethics?
-when gathering data, researchers need to consider wether their actions are ethical
-examples:
-should they ask permission before filming shopping habits
-should they ask permission before tracking online purchases and then recommending other products
-consider how questions are asked
What is a correlation when interpreting marketing data?
-looking at an apparent link between 2 variables e.g promotional spending and number of sales
What is a positive correlation?
A positive correlation is where and increase in one variable increases another variable
-Example:
-promotional spending and number of sales
-increase output increased variable cost
-temperature outside number of sales of ice cream
What is a negative correlation?
A negative correlation is where as one factor goes up another goes down and vice Vera
Example:
-as price goes up demand goes down
What does not correlation mean?
No correlation means there is no apparent relationship between variables
Is correlation useful?
If managers can identify key factors which determine demand they can estimate what is happening to these factors and predict demand
-essential when deciding on a pricing policy
What is a correlation value?
-correlation is given as a value between -1 and +1
-the higher the figure regardless of sign the stronger the correlation
- -1 is perfect negative correlation
- +1 is perfect positive correlation
- 0 is not correlation
What is a strong correlation?
-the line of best fit indicates the strength of the correlation
-strong correlation means that there is little room between the data points and the line
-if the data suggests a strong correlation, then relationships might be used to make predictions
What is a weak correlation?
-weak correlation means that data points are spread quite wide and far from the line of best fit
What does extrapolation mean?
-extrapolation is look at what has happened to figures un the past and continuing this trend into the future
-extrapolation is useful provided the identified trend continues in the future. Other wise it is a misleading trend
Why might a trend not continue in the future so extrapolation won’t work?
-new competitor
-covid
-economic crash
-technology
-social change- becoming unfashionable
-health scare
What are confidence levels?
-confidence levels give an indication of how certain researchers are of the results
-e.g a 76% confidence level means the researchers are 76% certain that their results are reliable and represents the population as a whole
What does the degree of confidence level depend on?
-the size of the sample
-how the sample was constructed e.g was it random?
-the margin of error I.e the confidence interval
What is a confidence interval?
-confidence interval is the possible range of outcomes for a confidence level
-example:
-a researcher may be 95% confidence that sales are between £200,000 and £350,000. This is a big margin of error
-if a firm asked them to be more specific they may be 65% confident that sales will be between £230,000 and £260,000. The confidence level has fallen because of a smaller range
What is market analysis?
-Market analysis is the process of analysing the size, structure and growth of a market in order to support marketing decisions
What can affect the usefulness of data?
-businesses usually support their marketing data with qualitative judgements which are personal judgements of experienced marketing staff
What marketing decisions are most likely to include qualitative judgements?
- when the product or business is new so there is no previous information on which to base these predictions
-when trends have changed so that it would be unwise to predict on the basis of past statistics
-when the factors influencing sales are not easy to quantify
What is marketing planning?
-each of the ingredients of the market is a key to success. no one element can be considered in isolation so this overall outlook is marketing planning
What is a marketing mix?
-marketing mix/ integrated marketing mix is all the activities that might affect a customers decision to purchase a product and whether they return to purchase again ie 7ps
