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Business Studies > Marketing > Flashcards

Marketing Flashcards

1
Q

marketing

A

meeting the wants and needs of customers so that marketings primary aim of increasing sales can be met

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2
Q

the marketing mix

A

4 Ps of marketing
price, product, promotion, place
each part affects the other

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3
Q

promotion

A

collection of techniques used to inform+persuade customers to buy a product or service

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4
Q

above the line promotion

A

uses media where there is no direct contact with potential customer

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5
Q

television advertising (above the line promotion)

A

reaches mass audiences
visual+sound easy to remember
very expensive

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6
Q

billboards (above the line promotion)

A

busy roads+traffic lights
more cost effective than tv
people less exposed bc they’re static
content needs to be concise

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7
Q

below the line promotion

A

business can contact customer directly

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8
Q

below the line promotion techniques

A 
email
personal selling 
telesales (phone)
product sampling 
leaflet distribution 
trade fairs
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9
Q

personal selling

A

direct link between a customer and a sales persons

inclu. sales assistants,door to door+telesales

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10
Q

advantages of below the line promotion

A

target those who shown genuine interest in product

offer personalised service

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11
Q

disadvantages of below the line promotion

A

customers become frustrated so media is ignored

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12
Q

Above the line promotion techniques

A 
Billboards 
Tv advertising 
Radio 
Magazines 
Cinema 
Sponsorship
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13
Q

Radio (above the line promotion)

A 
Locally 
Reach large group 
Doesn’t need full attention 
Change radio station 
Expensive prime time spots
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14
Q

Magazine (above the line promotion)

A 
Target certain group 
Well respected mag association 
Pass on to friends
Flick past it 
Put at the back with others
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15
Q

Cinema (above the line promotion)

A 
People from all sections of society 
Big impact big screen 
Audience can’t turn it off 
Arrive late 
Limited exposure
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16
Q

Sponsorship (above the line promotion)

A 
Sports persons/team
Product awareness 
Positive association 
Bad actions of sponsor linked 
Lack of control brand displayed wrong
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17
Q

Newspapers (above the line promotion)

A

National or local

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18
Q

what are the other two types of below the line promotion

A

branding

social media

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19
Q

branding

A

powerful for people to want to be associated with your brand
helps boost sales

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20
Q

social media

A

business website+social media pages directing target consumers

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21
Q

advantages of social media as a below the line promotion technique

A

more cost effective
personal customer interaction
social med boost traffic to website
easy to measure success

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22
Q

three social media strategies for promotion

A

cold sell
influencers/ambassadors
organic posts

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23
Q

disadvantages of social media

A

fail to respond/engage on sm=bad rep
costs of someone running it
influencer controversy

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24
Q

price

A

amount of money given up to obtain a good/service

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25
Q

cost plus pricing

A

adds % cost of making product to selling price

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26
Q

competitor pricing

A

based on prices charged by competitor

this price often lower to gain sales from rivals

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27
Q

price skimming

A

product more advanced/customers want to associate wi a particular brand
price is set higher
customers willing to pay

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28
Q

penetration pricing

A

business new to market
set prices lower to break customer loyalties
short term

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29
Q

marginal pricing

A

fixed+variable cost covered by current output

cost of producing extra unit only compromise variable cost

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30
Q

contribution pricing

A

price covers variable cost and gives a contribution to the fixed cost

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31
Q

psychological pricing

A

appeals to emotion over rational repsonses over price

e.g 0.99- would round down not up

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32
Q

price elasticity of demand formula

A

% change in demand/% change in price

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33
Q

how do you work out % change in demand

A

from a demand graph

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34
Q

what does it mean if price elasticity of demand is over 1

A

elastic in relation to price

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35
Q

what does it mean if price elasticity of demand is 1

A

its unit elastic (15% rise in price=15% contraction in demand)

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36
Q

what does it mean if price elasticity of demand is between 0-1

A

inelastic in relation to price

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37
Q

what does it mean if price elasticity of demand is 0

A

perfectly inelastic

demand doesn’t change when price does

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38
Q

What type figure does price elasticity usually come out as

A

Negative

Follows law of demand

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39
Q

Income elasticity of demand

A

Measure responsiveness of demand with changes in income

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40
Q

Formula for income elasticity of demand

A

% change in QD/ % change in income

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41
Q

What does it mean if income elasticity is more than one

A

They’re luxury products

42
Q

What does in mean if income elasticity of demand is less than 1 but more than 0

A

Product is a necessity

43
Q

Define cross price elasticity of demand

A

Responsiveness of demand for good x following a change in the price relating for good y

44
Q

Formula for cross price elasticity of demand

A

% change in demand for good x/ % change in price for good y

45
Q

Substitutes (cross price elasticity of demand)

A

Close substitutes have a strongly positive cross price elasticity

46
Q

Complement (cross price elasticity of demand)

A

Strong relationship, highly negative

47
Q

Unrelated products (cross price elasticity of demand)

A

Products have zero cross elasticity

48
Q

Summary points for elasticity formulas

A

Marketers decide wether to increase/decrease price
Assumes you will know what happens demand as a result of a change in variable
This info won’t always be available/accurate

49
Q

Product life cycle

A

Theoretical model which describes stages that a product goes through overtime

50
Q

Four stages of the product life cycle

A

Introduction
Growth
Maturity
Decline

51
Q

Key points of intro stages of product life cycle

A

Sales initially slow
Heavy promotion
Cash flow could be an issue
Penetration pricing used

52
Q

Key points of growth stage of product life cycle

A 
Sales increase quick 
Competitors become interested 
High promotion spending continues 
Adoptions to product made 
Increase distribution
53
Q

Key points of maturity stage of product life cycle

A

Weak rivals leave market
Defend position from remaining comp
More improvement to product
Positive cash flow likely

54
Q

Key points of decline stage of product life cycle

A

Tech advance,eco conditions + fashion fads=cause of decline
Drastic price fall (cost plus wi small %)
Limit distribution

55
Q

What is an extension strategy

A

Product starts to decline
Don’t withdraw
use strategy to bolster sales

56
Q

What are potential extension strategies

A 
Advertising (potential new audience) 
Price reduction (more attractive) 
Add value 
Explore new markets (new geographical)
New packaging
57
Q

Benefits of a product life cycle

A

Helps with planning

Spot trends in previous life cycles, avoid pitfalls

58
Q

Cons of the product life cycle

A

Too rigid e.g sales might dip in intro then rise again

Self fulfilling- product looks in decline so is discontinued, but just be a dip

59
Q

Product positioning chart

A

Plotting products on a grid

In relation to two important market features

60
Q

Why would marketers want to position a product in a highly saturated area of the market

A

Suggest high sales volume

61
Q

Product portfolio

A

Collection of products produced by a business

62
Q

How can a business analyse its product portfolio

A

With a product positioning chart

63
Q

Why would a business want to ensure it has multiple products in a market

A 
Increase sales 
Meet needs of multiple customer groups 
Compete with rivals 
Reduce risk 
Increase brand recognition
64
Q

Boston Matrix

A

Tool used to identify where to allocate investment

Categorises products into one of four areas based on market share and growth

65
Q

Four areas of Boston Matrix

A

Question marks (problem child)
Stars
Dogs
Cash cows

66
Q

Summarise stars (Boston Matrix)

A

High growth products
Heavy investment to sustain growth
Growth will slow but if maintain market share will become cash cows

67
Q

Summarise dogs (Boston Matrix)

A

Low market share in low growth market
Might have enough cash to break even, rarely invest
Usually closed/sold

68
Q

Summarise question marks/problem child (Boston Matrix)

A

Low market share, high growth market
Have potential but need substantial investment
Hardest products to make decisions on

69
Q

Summarise cash cows (Boston Matrix)

A

Low growth product, high market share
Little need for investments
Need to be managed for consistent profit
Can generate strong cash flow to fund stars

70
Q

Benefits of the Boston Matrix

A

Identify stars to invest in
Identify cash cows to reduce investment
See which question marks to invest in

71
Q

Why is the Boston Matrix limited

A

Other indicators which determine which stars to invest
Cash cows may still require advertising to maintain market share
Doesn’t identify the question marks to invest in

72
Q

Define place

A

How the product is distributed

73
Q

Channels of distribution

A

Provides link between production

74
Q

Retailer

A

Responsible for selling the final product to the consumer

75
Q

Types of retailing

A 
Multiples (chains)
Department (John Lewis) 
Convenience (costcutter)
Independents (shop run by owner) 
Franchises
76
Q

Key trends in retailing

A

Growth in out of town stores
Decline in independents
Increased use of tech in retailing

77
Q

Role of a wholesaler

A

Good for producers can’t deal wi every shop it sells to
Help small shops (can’t bulk)
Have own logistics
Allow producer+retailer focus on specialist areas

78
Q

Agent

A

Negotiate between seller+buyer

E.g admiral

79
Q

Key points about agents

A

Tertiary sector
Usually on commission
Don’t hold stock
Reduce cost of marketing

80
Q

What is channel 3 also called

A

Direct marketing

81
Q

Why have channels of distribution changed

A

From 1-2= increase size of supermarkets

From 2-3= internet sales

82
Q

What is online distribution

A

Tangible product being purchased online

Delivered by physical distribution

83
Q

What is digital distribution

A

Electronic methods to deliver good

Downloadable

84
Q

Advantages of online distribution

A

Geographical reach increase
Overhead lower e.g don’t need physical stores
Open all times

85
Q

Drawbacks of online distribution

A

Shipping+returns complicated
High initial capital investment
Some like to try before buy
Security problems

86
Q

Advantages of digital distribution

A

Convenient
No physical stores
No delivery costs

87
Q

Disadvantages of digital distribution

A

Not suitable for all products
Customers need Internet
Ongoing cost of systems+security
Illegal streaming competition

88
Q

Physical distribution

A

Physical method business used to distribute goods

89
Q

Types of physical distribution

A

Air-perishable
Road-smaller distance
Sea shipping- big bulky products

90
Q

Service marketing

A

How business increases sales for an activity that a business does for you. Intangible in nature

91
Q

Additional 3 Ps/ extended marketing mix

A

People
Process
Physical evidence

92
Q

People extended marketing mix

A

Make contact with customer to deliver product

93
Q

Process extended marketing mix

A

Systems and processes that deliver a product to a customer

94
Q

Physical evidence

A

Elements of the physical environment the customer experiences

95
Q

Viral marketing

A

Use of social media sites to increase brand awareness

Will be shared like a computer virus

96
Q

Drip marketing

A

Automated process send a set of messages

E.g ‘new season’ emails from clothes brands

97
Q

Why does drip marketing work

A

Increases visibility

Remind customer of business

98
Q

Why does viral marketing work

A

Shared instantly

99
Q

Examples of physical evidence

A

Uniform
Appearance
Cleanliness

100
Q

Examples of process

A

Website layout
Booking
Mobile apps

101
Q

Examples of people

A

Customer service
Friendliness
Capability

Business Studies (14 decks)

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