Marketing Flashcards
Who are consumers?
- User of the article
- Opposite of producer
- ‘Consumer goods’ are used directly, domestically and NOT in manufacturing
- Create ‘consumer markets’ for goods and services
Who are customers?
- Purchaser of the article
- ‘Industrial goods’ are used by commerce, industry and manufacturing. Industrial goods are described as being sold to ‘customers’, not ‘consumers’
- Industrial customers create ‘industrial markets’ for goods and services
- Customers who will never use the article can create ‘consumer markets’
What are the 5 P’s of the Marketing Mix?
Product, Price, Packaging, Promotion, Place
Marketing Mix - Product
- May be a physical entity or a service
- Should provide some benefit to the customer
- Judged on criteria such as: quality, durability, brand
Marketing Mix - Price
- Price is usually set by the market (market clearing price).
- Ability or willingness of consumer to pay
- Strategic Costing
What is cost plus pricing?
- Design product then set price
- Product cost + profit margin = selling price
What is target pricing and costing?
- Target market price minus profit margin = target cost
- Product designed accordingly
Marketing Mix - Packaging
Often considered a part of Promotion. Performs two principal functions:
- Catches the customer’s attention or conveys an impression of the product.
- Ensures that the product is delivered in good condition
Marketing Mix - Promotion
- Any type of ‘persuasive communication’
- Aimed at increasing purchases
- Broader target than the current customer base
- May be: short term (e.g. linked to sales) or longer term (e.g. public relations; press conferences, press releases, publicity events)
- Internal Promotion
- Advertising
Marketing Mix - Place
How the product reaches the customer. There are various ‘Distribution Channels’:
- “Selling” outlets
- Home Sales (e.g. Tupperware) to “Direct from Factory”
- Web-based
- Also important is the ‘customer experience’ (merchandise assortment, store location, store layout)
Order Qualifying Criteria
- Features which get the product into market place, and
- ensure it stays there and remains successful
Order Winning Criteria
- Features which collectively provide an important edge over the competition.
- Similar to Unique Selling Points (USP) in marketing
What constitutes a Unique Selling Point (USP) in a Product?
When a product offers the customer benefits that the competitor’s products are unable to match
Narrowcast advertising
Targeting specific people, also known as niche marketing
Broadcast advertising
Targeting a wide range of people, not specific
What are the 5 P’s of the Marketing Mix used to identify?
All the customer’s needs
What are the advantages of being a market pioneer/first mover/first to market?
- Creating a Temporary Monopoly giving ‘Super-Normal’ profits
- The existence of Network Effects where the more users there are, the more people want the product.
- Higher brand loyalty, reducing promotion costs
- Higher ‘Switching Costs’ for customers, also reduces promotion costs
- Broader product ranges that pre-empt competition
- Reduced costs through the Experience Curve and Economies of Scale
What is the difference between risk and uncertainty?
Risk is quantifiable, uncertainty is not. This means risks can be managed, uncertainties can’t be
What is the benefit of being a market lagger/follower?
They can learn quickly from mistakes made by market pioneers, as a result of market uncertainties, technological uncertainties or legal uncertanities
What market uncertainties are reduced by being a market follower?
- Able to witness what the customers like/dislike about pioneer’s product
- Customers more accepting of new design/technology
What technological uncertainties are reduced by being a market follower?
- Able to reverse engineer from pioneer’s product, reducing R&D costs
- Able to improve design by learning from pioneer’s mistakes
- Able to exploit pioneer’s bad reputation for any design/safety problems
What legal uncertainties are reduced by being a market follower?
- Authorities may attack the pioneer only
- Legislation more established, based on experience with pioneer
- Followers may be encouraged to avoid a monopoly
What is next bench syndrome?
Designing for other engineers, not for the real customer
What is a market leader?
- The dominant firm in the market, with the largest market share
- Every business aspires to become a market leader, this can be achieved by being a pioneer or a follower
