Marketing Flashcards
What is the purpose of Marketing?
Help achieve the org’s objectives Raise awareness of products Increase the number of customers in a market Inform customers about products Anticipate what customers want
What is the difference between differentiated and undifferentiated marketing?
Diff : organisations market towards a particular target market
Undiff: more than one target market
Advantages of differentiated marketing
Products are SPECIFICALLY TAILORED to customer requirements
Prices can be set to reflect the market segment
Promotions can be tailored towards the market segment
The most appropriate place to sell the product can be chosen
What are the differences between Market and Product led?
M: business responds to customer needs and wants WHEREAS P: business develop products based on what its good at
M: customer need and wants identified through MR WHEREAS P: little/no PR done as need and wants of customers not important
M: products based on customer wants WHEREAS P: products produced bcos the organisation thinks they are good at providing
M: the market may have significant comp WHEREAS P: the market may have little comp
What questions may businesses consider when consumers buy?
Why do they buy what they do? What motivates them? What influences buying decisions? What customers buy the products Where do they choose to buy? Why? What do they look for when buying?
What are the 4 different types of purchasing?
IMPULSE: without thinking. Been influenced?
ROUTINE: buying something out of habit, eg bread
LIMITED-DECISION MAKING: requires a little thought before a decision is made, eg piece of clothing
EXTENSIVE-DECISION MAKING: requires a high degree of thought and isn’t made often, eg new car or even house
What are the 7P’s of the extended marketing mix?
Product Price Place Promotion People Process Physical Evidence
Describe the 3 extra P’s of the marketing mix
PROCESS: the different processes and systems used to deliver the service being provided
PEOPLE: those involved in providing the service to customers
PHYSICAL EVIDENCE: the location of where the service is being offered and what it looks like
What can market research help find out?
TYPE of customers and their buying habits
What CHANGES might need to be made to existing products
What customers would like to see in the FUTURE
How customers have REACTED to different products, prices and promotions
What are the different types of Market Research?
FIELD (primary): New information
DESK (secondary): Already existing
Advantages and Disadvantages of Primary information
Adv:
Source is known • more reliable than secondary info
Info gathered for a specific purpose • relevant
Unbiased
Disadv:
Time consuming to collect, may delay decision making
Expensive • reducing profitability
Advantages and Disadvantages of Secondary information
Adv:
Easier to obtain than primary
Usually cheaper than primary
Disadv:
Collected for another purpose so maybe not as useful
Information may be biased
Advantages and Disadvantages of Internal information
Adv:
Unique to the organisation and • more relevant
Source is known and • more reliable
Disadv:
Info may not be up to date or complete • wrong decision could be made
Computer systems may be required to store info -> TMT expensive
Advantages and Disadvantages of External information
Adv:
Easy to obtain, saving organisation time
More information can be accessed through internet
Disadv:
Source might not be known and could be unreliable
Information may not be up to date • not relevant
What are the different methods of field and desk research?
Field: >survey/questionnaire >interview >observations >sampling >hall tests >focus groups
Desk: >websites >newspaper articles & magazines >government reports >textbooks
Describe a questionnaire/survey
Asking people’s opinions and views (done over phone, post, online or in the street)
Adv: Tailor made Q’s Cheap to conduct if online If online/post • reaches large audience As you’ve prepared it • unbiased/reliable
Disadv:
Expensive if using post, phone, IRL
Time consuming to get answers
Takes time + skill to be prepared
Describe an Observation
Watching something and recording what happens
Adv:
Can’t be lied to as don’t know they’re being observed • acting natural
Quantitative info gathered • easier to analyse
Disadv:
Observers need to be aware and trained
Need to be subtle
Cannot speak/clarify info or observations
Describe a hall test
A product being tested by customers to obtain opinions
Adv:
Allows first hand info to be obtained
Can clarify opinions
Relatively inexpensive to carry out
Disadv:
People maybe not honest about what they think about the product as they’ve got it for free
Describe a focus group
A discussion between a selected number of people and a researcher
Adv:
Allows the org to gain an understanding of people’s feelings
Understand more detail about their buying habits
Disadv:
Qualitative info TMT can be hard to analyse
Describe sampling
Random: randomly selecting people from a list, eg telephone directory
+ easy to set up and limits interviewer bias as the haven’t selected particular people to participate
- expensive to administer and assumes everyone is the same
Quota: selecting people to question based on certain characteristics, ie age, gender, etc.
+ less expensive to carry out than random sampling
- can maybe be biased
What are the two types of data?
Quantitative: factual and be counted
Qualitative: based on opinions
Describe the 6 stages of the product life cycle & what is the profitability at each stage?
Development: R&D…market research. NO SALES, HIGH COSTS & NO PROFIT
Intro: Product launch, heavily advertised to increase sales. LOW SALES, HIGH COSTS, LITTLE/NO PROFIT
Growth: Products gained more awarenes & sales grow rapidly. SALES GROW RAPIDLY, PROFITS BEGIN TO INCREASE
Maturity: Sales peak & product is well known. Need extension strategies. HIGH PROFITS
Saturation: End of maturity…everyone has product & no longer demanding. HIGH PROFITS BEFORE THEY DECREASE
Decline: Sales decline as newer & better products are introduced. PROFITS FALL AND A LOSS MIGHT EVENTUALLY OCCUR
What is a Boston Matrix?
Used to plot the range of products an org has
Sets products into *, ?, dogs and cash cows
?: High market growth & low market share
*: High market growth & high market share
Dogs: Low market growth & Low market share
Cash Cows: Low market growth & High market share
Advantages of a varied product portfolio
+ Spreads risk by ensuring profit from a variety of sources (if 1 does bad others ‘prop up’ finance)
+ Appeals to a wider range of customers (market segs) • more sales • more profit
+ Increased rep • brand awareness and loyalty
+ easier to introduce new products
+ cope with seasonal demand
Disadvantages of a varied product portfolio
- if 1 product gains a bad rep, may impact all
- difficult to monitor and manage
- very expensive (duplicated efforts in R&D & marketing)
- R&D of many different products
- cost of purchasing and machinery maintenance for different products might be high
- staff training on different products • time-consuming and expensive
What extension strategies can be used by an organisation?
Name of the product
Appearance of packaging to give a new image
Size, variety and shape, making it different from original
Price (up or down) to reach a different market segment
Methods of Promotion and/or advertising
Place the product is sold, ie online?
What are the different pricing strategies that can be used?
Low price High price Promotional pricing Cost-plus pricing Psychological pricing Market skimming Destroyer pricing Loss leaders Penetration pricing Pricing discrimination
What is a low price and why is it used?
Price charged lower than competitors
Customers will buy as it’s cheaper than alternatives
What is a high price and why is it used?
Price charged is higher than competitors
Customers will think its higher quality
What is promotional pricing and wily is it used?
Lower than normal for a short period
Customers think it’s a good deal, ie BOGOF
What is cost plus pricing and why is it used?
Cost of making the product plus a % added
Ensures costs are always covered and a profit is made
What is psychological pricing and why is it used?
Price charged to make customers think it’s cheaper than it is, ie £9.99
Tricks people into thinking product is cheaper
What is market skimming and why is it used?
High price charged for new and unique product. Maybe decreased once competitors arrive
High price as there is little/no competition
What is destroyer pricing and why is it used?
Price deliberately very low
Forced competitors out of the market, then charge higher after
What is a loss leader and why is it used?
Price charged is lower than cost of making the product
Attracts customers who then buy other products • overall profit
What is penetration pricing and why is it used?
Product is introduced at a low price and increased once product is more known
Encourages to buy and then slowly rise
What is pricing discrimination and why is it used?
Changing price depending on market
Favours market segments
Why does a business have to constantly review its prices?
See how hey can stay ahead of competition
Market place is constantly changing
What factors are considered when choosing a channel of distribution?
The actual product (is it perishable?)
The desired image/exclusivity
The availability of finance
Reputation of wholesalers/retailers
Legal restrictions
What are the different channels of distribution?
Selling DIRECTLY to consumers
Producer ———————> consumer
Selling through RETAILERS
Producer ———-> retailer —> consumer
Selling through WHOLESALERS
Producer -> wholesaler -> retailer -> consumers
What are the advantages and Disadvantages of using a wholesaler?
Advs:
+ bulk buying means distribution and storage costs down
+ wholesalers may promote • low advertising costs for producers
+ risk of not selling now put on wholesaler
Disadv:
- manufacturer loses control over what will happen to product
- less profit for each individual product
- customer loyalty is harder to maintain
What are the different types of retailers?
Supermarkets
Discount retailers
E-trailers
Convenience retailer
Describe a supermarket
Often very large orgs that but large quantities
Mainly supply food and drink but increasingly started to supply other products, ie homeware
Have put many smaller businesses out of business in some times
Describe a discount retailer
Provide products at a cheap price
Have become very popular in UK due to the economic climate
Growth of those resulted in other retailers having to discount their own products
Describe an E-tailer
Shopping online, ie Amazon
Low overhead costs
Requires large warehouses
Describe a convenience retailer
Normally a small shop with limited amount of products
Often found in busy residential areas - more expensive than large retailers
Don’t have the same buying powers
What are the different types of direct selling?
Internet selling
Personal selling
Direct mail
Mail order and TV shopping
What is internet selling and what are the advantages and Disadvantages?
Selling through websites and social media
Adv:
World wide customers
But only 24/7
Product info/stock updated easily
Disadv:
Customers can’t see/handle products
Customers may not want to share card details
Time delay between ordering and receiving
What is personal selling and what are the advantages and Disadvantages?
Trained staff member sells directly to customers
Adv:
Allows sales member to demonstrate how product works and to answer any q’s
Disadv:
Customers may feel pressured into buying the product
What is direct mail and what are the advantages and Disadvantages?
Posting letters/leaflets directly to homes of potential customers
Adv:
Specific market segments can be targeted TMT large geo area covered
Disadv:
Customers might not like
May not even look (junk mail)
What are the advantages and Disadvantages of mail order and tv shopping?
Adv:
Convenient to customers as they can look in their own times
Disadv:
Expensive to produce catalogues
What are the advantages and Disadvantages of celebrity endorsement?
Adv: If people like celeb: role model & want to buy product to be like them Reach ready made fanbase Competitive edge Successful celeb = increased sales Promotes good name for org
Disadv:
Expensive!
Celebs negative actions could lead to bad rep
Celeb must match with product and image
What are the different types of public relations?
Press release: written statement that communicated activities within the organisation
Sponsorships: organisation sponsor events with lots of public attention
Charity donations: organisations might donate sums of money to help and also seem socially responsible
What is into the pipeline promotion
- give examples
Manufacturers encourage retailers to stock their products
POS materials (Peters, displays) Staff training
What is out of the pipeline promotion
- give examples
Retailers encourage customers to buy from them
Dress samples
Loyalty schemes
Vouchers
Special offers
