Marketing Flashcards
Cameron House is a 5* Hotel Resort on the banks of Loch Lomond, the gateway to the Scottish Highlands. It has won many awards for the quality of service it provides to guests. This includes a hotel, luxury lodges, a golf course, spa and leisure centre, luxury rooms and
top quality restaurants serving local produce. It is also a favourite venue for weddings and the hotel is booked most weekends in the year for these events—a Wedding Co-ordinator is employed at the hotel. All wedding client detail records are stored on a database.
Suggest and justify a suitable market segment that Cameron House could target. (2 Marks)
- Income – high earners would be attracted to a 5 star hotel
- Families – as it is a resort with lots of facilities
- Sports people – as it offers sporting facilities
- Young couples – may be interested in the wedding service
- Older people – who are retired and take more holidays
Define the term market share. (1 Mark)
The number of consumers the organisation attracts as a percentage of the whole market.
Suggest 3 ways an organisation could segment its market. (3 Marks)
- By age.
- By gender.
- By level of income.
- By social class.
- By religion.
- By occupation.
- By geographical location.
Other than helping with choosing a location, describe 2 benefits of carrying out market research. (2 Marks)
Benefits of market research: • Helps to identify target market • Helps to identify competition • Helps to plan the marketing mix • Reduces risk of business failure • Identify pricing strategy • Identify customer needs/wants/trends
Suggest 3 field research techniques. (3 Marks)
- Interviews
- Postal surveys
- Telephone surveys
- Hall tests
- Online surveys
- Observation
- Focus groups
- Consumer audits
Describe the benefits of carrying out market research . (4 Marks)
- Allows an organisation to anticipate changes in consumer taste
- Can keep organisation ahead of competition
- Can ensure product meets the needs of consumers
- Can help identify a gap in the market
- Can provide information about the best place to sell the product
- Can give information about the price consumers are willing to pay
- Can help identify the best way to promote a product
- Can help organisations find out why certain products do/don’t sell
- Reduces risk of failure when launching a new product
- Products/Business promoted at the same time
Explain one advantage and one disadvantage of secondary information. (2 Marks)
Advantages
• Information is inexpensive to acquire therefore saving the organisation money
• Information is easy to access as it can be done from the office through a computer
• A wide variety of information can be available in a short period of time therefore saving the organisation many hours of primary research
Disadvantages
• Information may not be relevant as it has been gathered for another purpose
• It may be difficult to check for bias as you may not be able to go back to the original source
• Information may be out of date and things have changed since
Give two examples of secondary information. (2 Marks)
- Newspaper articles
- Magazine articles
- Information from another company website/Internet
- Government statistics
- Textbooks
- Trade journal articles
- Previous business records
Suggest 3 ways in which young entrepreneurs can conduct Primary Market Research. (3 Marks)
• Surveys/questionnaires (Accept different methods – eg Telephone, Postal, and Online).
• Interviews (Accept different methods – eg face-to-face, telephone).
• Consumer Panels/Focus Groups.
• Observation.
• Hall Test.
3 x suggestions – 3 marks
Identify and describe 2 methods of field research.
Personal Interview
• Face to face interview in the street or home.
• Respondent encouraged to answer.
• Misunderstandings dealt with immediately.
Postal Survey
• Series of questions posted to consumers.
• Inexpensive method of field research.
Telephone survey
• Consumer telephoned at home and asked questions.
• Response is immediate.
• Large numbers surveyed quickly.
Hall Test
• Consumers look at/try product and give feedback.
• Used often in supermarket when trialling new products.
Focus Groups
• Selected groups of people gather to discuss a product.
• People’s actual opinions/feelings are gathered.
1 mark per method (max 2)
1 mark per description (max 2) (4) No mark for questionnaire or survey on its own
Can get description mark if not given already for another method
Greggs is the UK’s largest bakery chain with nearly 1400 outlets. As the business has grown it has benefited from economies of scale. However, inflation has affected supplies and this causes pressures on profit levels. Market research is conducted regularly to help
management plan new products. Pressure from rivals means that Greggs is constantly looking at how to achieve the best marketing mix for their products. Busy peak periods often mean large queues in Greggs—such are the demands of customers for favourites such as sausage rolls.
Suggest and justify an appropriate method of primary research and secondary research that Greggs could use to gather market research.
Primary research that can be used to gather research:
Questionnaire/survey – can ask standardised questions to all sample, quick to complete.
Interview – can gather more detailed information than questionnaire, clarification can be given.
Consumer Panel/Focus Group – can get direct reactions to products/services, can be more cost effective than questionnaires/interviews.
Observation – cost-effective to gather, see reactions to products/ services.
Hall test/Taste test – can find out reactions to products.
Secondary research that can be used to gather research:
Newspapers/Magazines – find out useful information on rivals‟ products, cost-effective.
Rival customer websites – contain details of products/services, up-to-date, cost effective.
Government Statistics – contain information on economy/trends etc helps Greggs plan decisions.
Internal information – sales/stock/financial records can help Greggs identify successful/unsuccessful decisions and make future plans.
1 × Primary Method
1 × Secondary Method
2 × justifications (must be different)
Sony
Sony are a multinational company. They manufacture a range of electronic products, including games consoles, laptop computers and TVs. Sony are also involved in the entertainment industry.
Competition is fierce in these markets and Sony are constantly producing new
products and services to attract customers. This means that they have products
at all stages of the Product Life Cycle.
Suggest and justify how altering the “Product” and “Price” elements of the Marketing Mix could extend the Product Life Cycle of a Sony Laptop. (4 Marks)
Extension strategies that could be employed:
• Product strategies – add more features, re-design, range of colours etc.
Justification – makes product more attractive, updates image, and stands out from rival products.
• Price strategies – lower price to widen range of market, increase price to make product more exclusive.
Justification – customers attracted to lower prices/value for money or customers attracted to image of a high price product.
Accept any 2 suitable strategies – 2 marks
Adequate and different justifications – 2 marks
Max 2 marks for product strategies and max 2 for price strategies.
Greggs is the UK’s largest bakery chain with nearly 1400 outlets. As the business has grown it has benefited from economies of scale. However, inflation has affected supplies and this causes pressures on profit levels. Market research is conducted regularly to help
management plan new products. Pressure from rivals means that Greggs is constantly looking at how to achieve the best marketing mix for their products. Busy peak periods often mean large queues in Greggs—such are the demands of customers for favourites such as sausage rolls.
Suggest how Greggs could adapt the 4 elements of the marketing mix to win customers from its rivals. (4 Marks)
Product – the business can change the recipe, the packaging, the design of the products.
Price – the business can change the price of its products.
Promotion – the business can choose different ways to promote its products.
Place – the business can choose better places to locate the shops.
Max 2 for more than one from each element
NAIRN’S LIMITED
Nairn’s Ltd is based in Edinburgh and has been making oatcakes since 1888.
The Nairn’s range of food is naturally wholesome and nutritious.
Nairn’s now sell their products all over the world becoming a global brand.
Rising food prices have increased the cost of the main raw materials by over 10%. Nairn’s have increased new product development and marketing to increase sales to cope with rising costs.
Explain what is meant by the term brand. Describe 2 benefits to a business of establishing a successful brand. (3 Marks)
A brand is a name, logo or symbol which identifies a business or product.
Advantages:
• Easily recognised
• Brand loyalty can be created
• Creates a brand image
• Reduces need for advertising, brand advertises itself
• Easier to launch a new product/line
• Higher prices
• Higher profit/sales/market share
• Higher prices may be charged for the product
• Increase profits/sales/market share
• Easier to obtain finance as established business
Identify 3 stages in new product development Nairn’s Ltd would follow before launching a new product onto the market. (3 Marks)
- Market Research
- Brainstorming / Developing ideas
- Creating a prototype
- Test Marketing
- Modification
- Advertising
- Launch
- Obtaining finance
- Decisions made eg price/package design – accept as separate points
