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Marketing Flashcards

1
Q

What happens in the introduction stage of the product life cycle?

A

Price can be high, profits are often low, advertising expenditure can be high

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2
Q

What happens in the growth stage of the product life cycle?

A

Profits may start to be earned, advertising expenditure is still high, price may fall as the first competitors enter the market

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3
Q

What happens in the maturity stage of the product life cycle?

A

Competition will increase, sales at their peak, profits should be high.

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4
Q

What happens in the saturation stage of the product life cycle?

A

Firms should try reduce their costs so that pricing strategies can be more flexible, profits may be maintained but can start to fall.

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5
Q

What happens in the decline stage of the product life cycle?

A

Sales can now fall fast, advertising costs will be reduced, total profits will fall, price is also likely to fall but by concentrating on remaining market niches there should be some price stability

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6
Q

Advantage of the introduction stage

A

People become aware of the product

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7
Q

Advantage of the growth stage

A

More sales&profits, more money invested

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8
Q

Advantage of the maturity stage

A

Sales peak, profit will be made

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9
Q

Advantage of the decline stage

A

Other products that the business have will begin to increase in sales

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10
Q

Disadvantage of the introduction stage

A

Can be expensive, sales are low, low profit

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11
Q

Disadvantage of the growth stage

A

Competition update their products

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12
Q

Disadvantage of the maturity stage

A

Sales begin to decline, profit margin decreases

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13
Q

Disadvantage of the decline stage

A

Market starts to shrink, promotion decreases, sales and profit decline

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14
Q

What is a star in terms of market share and growth?

A

High market share

High market growth

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15
Q

What is a cash cow in terms of market share and growth?

A

High market share

Low market growth

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16
Q

What is a problem child in terms of market share and growth?

A

Low market share

High market growth

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17
Q

What is a dog in terms of market share and growth?

A

Low market share

Low market growth

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18
Q

Why is it good to use the Boston matrix?

A

By having a strong Boston matrix a business can use money from its cash cows to invest in the question marks so they can become stars. Because the products are all related in this way, it’s important to take them all into account when making decisions.

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19
Q

The marketing mix-price

What is market skimming?

A

Charging a high price to maximise profits on each item sold.

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20
Q

Market mix - price

What is market penetration?

A

This aims to gain market share so to achieve this they price the product at a lower level than the market leader. Gross profit margins using penetration marketing are usually relatively low but the objective is a high level of sales allowing a good net profit to be made.

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21
Q

Market mix - price

What is going rate price?

A

They have to keep their prices at what consumers are used to paying.

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22
Q

Market mix - price
Existing products and markets
What is customer value pricing?

A

Prices are set at a level that matches what consumers may expect to pay

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23
Q

Market mix - price
Existing products and markets
What is price discrimination?

A

Different prices are charged to different groups of consumers, that are separated by lifestyle, time or geography.

24
Q

Market mix - price
Existing products and markets
What is loss leading pricing?

A

Selling of products at a loss with the expectation that this will produce further sales of some form, and these sales will recoup the initial loss and also make some profits.

25
Q

Market mix - price
Existing products and markets
What is destroyer pricing?

A

This is a predatory form of pricing where the objective is to force competitors out of the marketplace.

26
Q

Market mix - price
Existing products and markets
What is price leadership?

A

When the market has a price leader, then this product or brand has such market presence or power, all other producers can do is follow the price leaders lead.

27
Q

Market mix - price
Cost based pricing
What is cost plus pricing?

A

A profit percentage is added to the costs of producing the good.

28
Q

Market mix - price
Cost based pricing
What is full cost pricing?

A

This is the same idea as cost plus pricing but taking the concept further, now all the costs of the firm are being taken into consideration. This means that each good will bear its proportion of overhead costs such as marketing or administration.

29
Q

Market mix - price
Cost based pricing
What is contribution pricing?

A

This is almost the same thing as full cost pricing but in this case price will be based on the variable costs plus a contribution towards overheads and profits.

30
Q

Market mix - product
Research and development
What is desk research?

A

Secondary research, data gathered by someone else.

31
Q

Market mix - product
Research and development
What is field research?

A

Primary research, gathering data specifically for ones own use.

32
Q

Market mix - product
Research and development
Product development

A 
Gathering data through market research.
Use research data to recognise potential markets and to match these markets to product ideas.
Test the feasibility of new ideas.
Financial analysis of the product.
Develop the product.
Launch he product.
33
Q

Market mix - place or distribution

Why is place important?

A

They must be accessible and place can be used to establish brand identity.

34
Q

Market mix - place or distribution

What is direct selling 1?

A

Manufacturer - consumer

35
Q

Market mix - place or distribution

What is indirect selling 1?

A

Manufacturer - retailer - consumer

36
Q

Market mix - place or distribution

What is indirect selling 2?

A

Manufacturer - wholesaler - retailer - consumer

37
Q

Market mix - place or distribution

What is direct selling through an agent?

A

Manufacturer - agent - consumer

38
Q

Market mix - promotion

What are the objectives of promotion?

A

To provide potential customers with readily available information.
To increase sales or market share.
To give the products an image.
To establish a corporate image.
To enable long term planning to take place.

39
Q

Market mix - promotion

What is above the line promotion?

A

Advertising

40
Q

Market mix - promotion

What is below the line promotion?

A

Offers a wide range of alternative promotional strategies and these are often used to support above the line promotion.
E.g. Personal selling, packaging, special offers, direct or junk mail, sampling, sponsorship

41
Q

What are the five stages of the product life cycle?

A 
Introduction
Growth
Maturity
Saturation
Decline
42
Q

Market mix - promotion

What does clicks and bricks mean?

A

It’s a marketing term which means firms need to have a web presence (clicks) plus a physical presence on the high street and shopping centres (bricks)

43
Q

How has the internet impacted marketing?

A

It’s become easier to compare prices, it’s become easier to sell niche products and it’s become easier to promote products through things like click throughs, search engine listings and search engine advertising.

44
Q

What is a brand?

A

A brand is a named product which consumers see as being different from other products and which they can associate and identify with.

45
Q

Why use branding?

A 
Increased loyalty.
Separate product from competition.
Increased asset value.
Make consumer choice easier.
Increase inelasticity of demand.
46
Q

What are the disadvantages of branding?

A

High cost of advertising.
Loss of brand value for one product can affect a whole range of similarly branded products.
Brands invite competition- often from copycat manufacturers.
High cost of research and development in ensuring the brand continues to develop and lead the market.

47
Q

Protecting brands, to achieve this, firms must:

A 
Be sure of the brands identity
Offer value to customers
Advertise and promote
 Carry out market research
Ensure quality
Continually develop the brand
Remember what made the brand successful in the first place
Protect the brand from competition and react to competition when it occurs
48
Q

How can you measure brand value?

A

On the balance sheet you can find a firms brand value and they can be measured by estimating the difference between what sales are likely to be like without their brand. The brand is likely to have more sales than their competitor because of brand loyalty. The difference in sales is part of the value of the brand.

49
Q

What is industrial marketing?

A

The sales of goods between businesses. These are goods that are not aimed directly at consumers.

50
Q

How do we use place in industrial marketing?

A

When we consider place in industrial marketing, two methods of attracting consumers to the fore, these are trade fairs or shows and B2B portals on the Internet.

51
Q

How do we use price in industrial marketing?

A

For business selling goods to other businesses it is not unusual for prices not to be fixed, but instead negotiated. The final price will depend upon quantity supplied, delivery dates, competitor actions and potential for future custom.

52
Q

How do we use product in industrial marketing?

A

As in consumer marketing we see both product and asset led firms, component suppliers may be required to change product design, or produce products to fit with the production methods of buyers.

53
Q

How do we use promotion in industrial marketing?

A

Typically promotion occurs through trade magazines and trade fairs. But personal. To person selling is also very important.

54
Q

What is international marketing?

A

This is all about selling a firms goods or services oversea i.e. Exporting

55
Q

Advantages of moving overseas

A 
Higher earnings.
Spreading of risks.
Saturation of home market.
Cashing in on the brand.
Benefits of economies of scale.
56
Q

Problems with moving overseas

A

People in different countries have different needs, priorities, incomes and tastes.
Currency change.
Cultural differences.
Distribution problems.

Business (4 decks)

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