Marketing Flashcards
What is the role of the marketing department
Help achieve organisational objectives
Anticipate customer needs
Raise awareness
Increase sales
What are the 4 types of purchases
Impulse
Routine
Limited
Extensive
What is an impulse purchase
Buying something out of the sour of the moment
What is a routine purchase
Buying something out of habit
What is a limitless purchase
Buying something that requires some thought before buying
Dress for an occasion
What is an extensive purchase
Buying something that requires a lot of thought eg house or car
What are the different ways of advertising
Radio
TV
Transport
Newspaper
What is a personal interview
A face to face interview with an interviewer asking questions
What is the advantages of a personal interview
Clarification can be gained on mis understood questions
Information obtained instantly
Body language can be gauged
What is the disadvantages of a personal interview
Time consuming and expensive
Researcher may require training
What is a telephone survey
People are contacted by telephone and asked to answer a series of questions
What is the advantages of a telephone survey
Large geographical areas can be covered
Most cost effective
Information is obtained instantly
What is the disadvantages of a telephone survey
People may not be willing to give up time to answer quantiles in their own time
Time consuming
What is an online survey
A website used to ask questions to gain information
What is the advantages of using an online survey
Online software is often free so cost effective
Large geographical areas can be covered
Software often collects and analyses data
What is the disadvantages of an online survey
Free online software can limit the number of questions asked
People require Internet access
There is no means of clarification so the questions need to be suitable and carefully designed
What is an observation theory
Involves watching a situation or recording what happens ie reactions or selling techniques in a business
What is the advanTage of an observation theory
Often people being observed are unaware of what is going on
What is the disadvantage of an observation
Those being observed cannot be asked for reasons or opinions
What is a halls test
Involves a product being given out free of charge to a select number of people to test for free to keep to give back their opinion on the product before producing mass amounts of the product if there is issues to be altered however as the product is free for those giving the feedback they may not be wholly honest
What is a focus group
A discussion between a select number of people and a reasearcher to reserach a specific topic the organisations gains insight into a number of different peoples opinions however it may be difficult to analyse the data they have received
Name 4 extension strategies when developing a product
Change the appearance of the product or tha packaging to make it look more appealing
Change the size variety or shape of the product to make it different from the original
Improve the quality of the product
Change the method of promotion eg offer discount
Describe what branding is
A product or range of products which have a unique or widely known persona
A word symbol or phrase that is registered to that organisation
What is the advantages of branding
- brands have the potential to become the market leader
- brands can charge higher prices therefore profits can increase
- brands can become trendy
- demand can become stable so it allows for better production planning
- customers see brands as better quality and trust the brand
What is the disadvantages of branding
- lengthy to establish it can take years in some cases
- legal action against copy cat brands can be lengthy
- high promotion costs even mature brands still need to remind customers
- changes in fashion can damage the image of the brand
- bad publicity of one product could affect the sales
- copy cat brands can influence sales
- -it can be difficult to persuade customers to switch brands as the become loyal
Why do organisations have product portfolios
When they are selling more than one product
To reduce the risk of failure
Attract a variety of market segments
Increase sales and profits
Makes it easier to introduce new products
Increase awareness of the organisation
Cope with seasonal sales
In the Boston matrix what are the star products
High market growth and high market share
. A business wants to have stars in a product portfolio as it is likely to be profitable due to the high market share. However, a business will need to invest in the product to cope with a growing market and growing sales. This could mean investing in new production facilities or promotion to fend off competition. Organisations hope to have as many star products as possible and it is hoped that a star will mature into a cash cow.
What are the 4 types of retailers
Supermarkets
E trailer
Discount retailer
Convience retailer
What is a supermarket
Large organisation that buys large quantities for re sale
Supplies food drink homeward and electricals
What is a discount retailer
Supply products at a very low price
Thriving due to the economic climate
Forces other retailers to lower their prices
What is an e tailer
Customers shop online to have their products delivered to them
What is a convince retailer
A small shop with a limited amount of products usually located in small residential areas
Which means that they can charge higher prices due to their ‘convenience’
Why is consumer behaviour important to an organisation
It helps the organisations make decisions on how to market and develop their products
What is market research
Organisations carry out market research to investigate the wants and needs of the exiting and potential customers and also the trends in the market
What is the market led approach
Customer wants and needs identified through market research
What is the product led approach
Little or no market research at all
Product produced according to the organisations strengths
What are the different pricing strategies
Loss leader Low price High price Penetration Promotional Physiological Destroyer Market skimming Competitive cost plus contribution
What is above the line promotion
Mass media promotions produced to reach a large range of people
To advert, cinema adverts, magazines ,Bill boards , newspapers
What is below the line promotion
Promotions aimed at smaller focused groups of people
Direct selling
Public relations
How can ICT be used in the management of marketing
The Internet can be used for market research
The Internet can be used to advise on products based on buying/browsing history
E-commerce is used to sell online
Social media can be used to interact with customers
EPOS can be used to gain buying behaviour
Describe the loss leader pricing strategy
The price charged is actually lower than the cost of production this attracts customers to buy the product but all
So to buy other normally priced products whilst they are shopping
Describe the low price pricing strategy
The organisation charges a lower price than competitors this will attract more customers than the competition
Describe the high pricing strategy
The organisation charges a higher price then competitors which makes the customer think they are getting a higher quality than usual
Describe the promotional pricing strategy
The organisation charges a lower price for a short period of time the product will be bought by customers as it is on special deal
What is physiological pricing
The price charged makes the customer think that they are getting a bargain for example 99p instead of a £1 if attracts people who buy on impulse as they think the product is cheaper than it is
What is the market skimming pricing strategy
The organisation charges a higher price during the introduction and growth of the product then if there is little or no competition the price of the product falls
What is penetration pricing
The organisation sets a Low price for new products to attract customers
Once awareness and popularity has increased so does the price
What is premium pricing
High prices are charged for the product which gives the product a unique and exclusive image which attracts customers therefore high profits are made
What is destroyer pricing
The organisation deliberately sets their price low as competition cannot match the price so are forced out the armed which allows the organisation to increase the price
what is the advantages of an organisation having a product portfolio
-higher profits will be achieved by selling more than one product which may benefit lower production costs as they can share the line of production
-can raise the profile of the company
-products can be launched on the reputation the other products
-sales will be constant if one product fails you have others to fall back on
- a wide range of products can meet the needs of different customers
-Having a range of products in different stages of their life cycles means that there will always be profitable products to help support the other products which are developing and growing.
-A range of products can help overcome seasonal fluctuations in demand for certain products.
Launching a new product is less of a risk because established products within the organisation can be used to help support the unprofitable launch period.
-A wider range of potential customers will exist as the portfolio should have products to appeal to a broad range of tastes.
what is the disadvantage of an organisation having a product portfolio
- many products take years to develop and some don’t make it to the market
- may forget their core activity and objectives may get lost
- high costs involved in research and development
- high marketing costs
- bad publicity of one product could affect the sales of other products
- Staff may need to develop knowledge of a very wide range of products, meaning that specialist knowledge is difficult to acquire.
- The manufacturing for such a wide range of products is likely to require investment in a variety of machinery which could prove very expensive.
- There will be a requirement for completely unrelated areas of research and development, which will also be expensive.
what is a cash cow in the boston matrix
is a product with a relatively high market share, although it has stopped growing. It is therefore well positioned in the market and likely to be profitable, but there will be little chance of increasing sales and profits in the future. There will be little need for investment - with slow growth in sales there should be little need for new premises for example. Money coming into the business from profits will not need to be used for investment, but can be used to support the growth of other products if needed. These products are important for the long term prospects of an organisation.
what is a problem child in the boston matrix
also known as question marks - are products with relatively low market share in a fast growing market. This can be a problem for a business as it is unclear what should be done with these products. It isn’t likely that there will be any profit from this product and in fact it will need investment to help increase sales of the product. Eventually, these products can develop into stars or even cash cows. However, if sales do not improve, they will eventually turn into dogs.
what is a dog in the boston matrix
are products with a relatively low market share in a market with low growth. Dogs have poor prospects for future sales and profits. They may generate some cash flow because they will need little investment but may earn some profit. It is likely that these products will be withdrawn from the market place before they start creating a loss for the business.
what are the 6 stages in the product life cycle
1 development 2 introduction 3 growth 4 Maturity 5 saturation 6 decline
describe the development stage of the product life cycle
This is where a product is researched, designed and a prototype will be made. A large percentage of products will never progress beyond this stage
describe the introduction stage of the product life cycle
This is the launch stage of a new product.
describe the growth stage of the product life cycle
Where consumers are becoming more aware of the product and competitors may start to enter the market.
describe the maturity stage of the product life cycle
The product has become commonplace on the market and competition will be increasing and established.
describe the saturation stage of the product life cycle
There will be a large number of competitors and not all products will survive. Consumer tastes may change and demand falls.
describe the decline stage of the product life cycle
The product is no longer desirable and is likely to have been replaced by a newer version or technology. like iPhones
what is the stage of sales in the development stage of the product life cycle
Zero.
Remember: consumers don’t know about products that are at this stage - it’s impossible to buy something you don’t know exists!
what is the stage of sales in the introduction stage of the product life cycle
Initially low, as few consumers know about the product at this stage.
However, some products will have little or no competition at this stage so high prices can be charged.
what is the stage of sales in the growth stage of the product life cycle
Sales begin to increase due to increased consumer awareness.
what is the stage of sales in the maturity stage of the product life cycle
Sales of the product will be high.
what is the stage of sales in the saturation stage of the product life cycle
Sales will level out.
Prices may need to be revised and lowered to ensure survival in a highly competitive market place.
what is the stage of sales in the decline stage of the product life cycle
Sales will fall until the product is withdrawn.
what are examples of way of extending the product life cycle
Changing the product to keep ahead of competitors Promote frequent use Changing promotional methods Developing new markets for existing products Finding new uses Develop a wider range of products Altering the packaging Changing the channels of distribution Change of name
what must an organisation consider when setting a price
The cost of production
How much profit the producer wishes to make
The quality of the product
The amount the consumer is willing to pay
The amount being charged by competitors
The target market for the product
what is cost plus pricing
This involves setting a price by calculating the average cost of producing goods and adding a mark-up for profit.
what is contribution pricing
This method takes into account that different products within a company might need to be priced using different criteria
what is the advantages of having a diversified product portfolio
selling a variety of products can increase the profits
it is easier to increase brand awareness
new products can be launched easily as they will be recognised
a range of products spreads the risks of failure
changes in demand or seasonal demand are easier to cope with
a wider market can be targeted with different products
what is the disadvantages of having a diversified product portfolio
advertising costs are high
it can be expensive to continually research and develop new products to keep a large product portfolio
one product may cause a problem that can affect the whole portfolio
what factors must be considered by an organisation before choosing a channel of distribution
Finance(internal) technical qualities ( internal) image of the product legal restrictions (external) shelf life of the stage of the product life cycle
what are the 4 channels of distribution
manufacturer —– customer
manufacturer—- wholesaler —- customer
manufacturer —– retailer —- customer
manufacturer — wholesaler — retailer — customer
what are the advantages of using retailers
retailers prepare good for sale
buy in bulk saving time and making smaller deliveries
more direct channel of distribution so higher percentage of profit for the manufacturer
retailer may have an established customer base
retailer may offer credit facilities
located nearer to customers
they have trained staff who know about the products
what are the disadvantages of using retailers
for the customer sometimes there is too much choice or retailers deciding which products they wish to sell rather than what customers really want
for the manufacturer - they have to rely on the retailer promoting and selling the product in the way that they want also having to choose which retailer they want to sell their products can be a problem
what are the advantages of using a wholesaler
for the consumer or small business - the bulk is broken down into small chunks so that they are able to afford it
for the small business - the wholesaler may provide some discounts in buying in bulk
it can promote to retailers saving costs
wholesalers finish off packaging and labelling saving time and money
what are the disadvantages of using a wholesaler
for the customer - increased prices
compared to direct sales
for the manufacturer the wholesaler needs to be reliable and promote and sell the product in the way that they want
what are the advantages of using direct sales
for the consumer direct selling usually means a more tailor made product for their own requirements
for the manufacturer they can maintain contact with their customers to ensure that they provide what they want
what are the disadvantages of using direct sales
for the consumer - there may not be a wide choice , therefore prices can be difficult to negotiate
for the manufacturer - they need to employ additional staff to do the selling
what is above the line promotion
Above the line promotion refers to mass media marketing. This is marketing which is designed to appeal to a very wide range of people and to be seen by a large number of people. This type of marketing includes TV advertising, cinema advertising and billboards, as well as techniques like celebrity endorsement.
what are the advantages of using above the line promotion
often advert design is outsourced to advertising agencies meaning high quality adverts
what are the advantages of using above the line promotion
often advert design is outsourced to advertising agencies meaning high quality adverts
adverts can reach very wide audiences across many market segments
what are the disadvantages of above the line promotion
the business dosent have direct control over which consumers their products are advertised too
above the line is very expensive
what is below the line promotion
uses small focused media to convey messages in order to increase sales and awareness of their product
what are the advantages of using below the line promotion
businesses have more control over the customers that the adverts are aimed at
more affordable than Above the line so more suitable for smaller businesses
messages can be tailored to a specific group
what are the disadvantages of using below the line promotion
impact can often only last a limited period
some customers dislike Below the line methods as they feel that they are intrusive
who is promotion aimed at
retailers and consumers
what are into the pipeline promotions
these are aimed at retailers who agree to sell the finished product from the manufacturer (extended credit)
what are out of the the pipeline promotions
these are aimed at consumers in order to persuade them to buy the product (discounts)
how can technology be used in marketing
advertisement social media
EPOS
Internet for market research
what is a product led organisation
one that concentrates solely on the production process and the product rather than what the customer wants , often research is conducted with no actual specific end product in mind
what is a customer led organisation
one which identifies what the customer wants through carrying out extensive market research and tries to provide the organisations must be responsive to changes in the market
what is people in the extended marketing mix
within the extended marketing mix refers to those employees of an organisation who are actually in contact with the customer.
what is customer service in the extended marketing mix
Customer service within an organisation can take many different forms. Each organisation will develop a customer service policy which suits the needs of the organisation and the organisations customers. The exact contents of the customer service policy will differ according to the needs of the individual organisation
what is process in the extended marketing mix
Process refers to the processes involved in implementing marketing strategy - for example, the processes related to customer care
what is physical evidence in the extended marketing mix
Physical evidence relates to the actual store or service experience provided for customers - the facilities and infrastructure of a business . This includes store layout and atmosphere - taking into account lighting, music and even smell! Customers expect the experience inside a store to reflect their expectation of a brand. This also applies to virtual/on-line stores - the layout of a website is crucial to encourage customers to buy.
