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Business A Level > Marketing > Flashcards

Marketing Flashcards

1
Q

What is meant by marketing

A

Meeting the needs and wants of customers so that marketing’s primary aim of increasing sales can be met

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2
Q

What is the marketing mix

A

4 P’s

  • Product
  • Price
  • Place
  • Promotion
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3
Q

What is meant by promotion

A

The collection of techniques used to inform and persuade consumers to buy a product or service

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4
Q

What are the 2 types/categories of promotion

A

Above the line

Below the line

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5
Q

What is meant by above the line promotion

A

Promotion which uses media where there is no direct contact with the potential customer

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6
Q

What are some examples of above the line promotion strategies

A
  • Television
  • Billboards
  • Radio
  • Magazines
  • Cinema
  • Sponsorship
  • Newpapers
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7
Q

Recall who can be targeted with one of the above the line promotion strategies, the advantages of this strategy and disadvantages of it

A

Random

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8
Q

What is meant by below the line promotion

A

Promotion where the business can directly contact the potential customer

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9
Q

Examples of below the line promotion strategies

A
  • Email
  • Personal selling
  • Telesales
  • Product sampling
  • Leaflet distribution
  • Trade fairs
  • Internet (website)
  • Social media
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10
Q

How should the advantage of social media being cheaper be referred as

A

More cost effective, not free

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11
Q

How can social media be used for promotion

A
  • Cold sell
  • Use of influencers/brand ambassadors
  • Organic posts showing personality to engage audience
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12
Q

What is meant by price

A

The amount of money a customer needs to give up in order to obtain a product or service

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13
Q

What are the 7 pricing strategies

A
  • Cost-plus pricing
  • Competitor pricing
  • Price skimming
  • Penetration pricing
  • Marginal pricing
  • Contribution pricing
  • Psychological pricing
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14
Q

What is meant by cost-plus pricing

A

Add a percentage to the cost of making the product to get the selling price

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15
Q

What is meant by competitor pricing

A

Set based on prices charged by a competitor for a similar or identical product

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16
Q

What is meant by price skimming

A

When a price is set higher than that of rivals products because it’s has a higher value eg brand, more advanced technology

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17
Q

What is meant by penetration pricing

A

When a business that is new to a market sets a lower price than competitors in an attempt to break customer loyalties from trusted brands
Usually short-term

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18
Q

What is meant by marginal pricing

A

When price is set only to cover variable costs, as the level of output that’s revenue covers both fixed costs and variable costs has been surpassed

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19
Q

What is meant by contribution pricing

A

Setting a price to cover variables costs and make a contribution to covering fixed costs

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20
Q

What is an example of when contribution pricing may be used

A

In a hotel In an off-peak time

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21
Q

What is meant by psychological pricing

A

Reducing the price slightly to make the customer believe that the price of somethings is a lot lower than it actually is

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22
Q

What is the formula for price elasticity of demand

A

%change in D/%change in P

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23
Q

Interpretation of Ped results

A

Above 1 = Price elastic
1 = Unit elastic
Between 0 and 1 = Price inelastic
0 = Perfectly inelastic

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24
Q

What should the answer of Ped always be

A

Negative
Because of an inverse relationship between price and demand
Inferior goods would be positive but unlikely to be asked this in business

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25
Q

What is the formula for income elasticity of demand

A

% change in QD/% change in income

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26
Q

Interpretation of income elasticity of demand results

A

More than 1 = luxury

Between 0 and 1 = necessity

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27
Q

What is the formula for cross price elasticity of demand

A

% change in D for A/% change in price for B

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28
Q

Interpretation of results for cross price elasticity of demand

A 
Positive = substitutes 
Negative = complements
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29
Q

What is a use of working out elasticity

A

Allows firms to find optimal sales price

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30
Q

What is a limitation of using elasticities

A

Prediction of changes in demand, which is even more difficult for a brand new product

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31
Q

What does pricing mix mean

A

Pricing strategy

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32
Q

What is the product life cycle

A

A model describing the stages of level of sales that a product goes through over time

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33
Q

Draw the product life cycle

A

In book 29th jan 2020

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34
Q

What is the purpose of the product life cycle

A

To tack progress to aid decision making at each stage

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35
Q

What are the 4 stages of the product life cycle

A

Introduction
Growth
Maturity
Decline

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36
Q

What is meant by introduction in the product life cycle

A

Researching, development and launching the product

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37
Q

What is meant by growth in the product life cycle

A

When sales are increasing at their fastest rate

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38
Q

What is meant by maturity in the product life cycle

A

When sales are near or at their highest, and growth of sales is slowing down

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39
Q

What is meant by decline in the product life cycle

A

When sales begin to fall

40
Q

What is meant by an extension strategy

A

A strategy to increase sales when they begin to decline and therefore extend the products life cycle

41
Q

What are some examples of extension strategies

A 
Advertising 
Price reduction
Add value
Enter new markets
Change packaging
42
Q

What are advantages of using the product life cycle

A
  • Aids decision making and planning

- Can spot trends of past similar products to avoid pitfalls

43
Q

What are some limitation of using a product life cycle

A
  • Suggests that all products will follow that pattern, which is often not the case
  • Doesn’t consider other factors (eg might start to decline but then rise again due to changes in fashion or economic factors)
44
Q

What is a product positioning chart/market map

A

A grid that considers 2 important features of the market and where a product can be plotted

45
Q

Why is a product positioning chart useful

A

Allows business to identify gaps in the market when looking to launch a new product or adapt their existing one

46
Q

What may marketers not aim to fill a gap in the market

A

A crowded segment suggests that products of this nature have high demand and therefore high sales volume

47
Q

What is meant by a product portfolio

A

The collection/range of products that a business produce

48
Q

How can a business analyse its own product portfolio

A

Using a product positioning chart

49
Q

Why do firms want to have a large product portfolio

A 
Increase sales
Meet needs of different customers
Spread risk
Increase competitiveness
Increase cash flow
Increase brand awareness
50
Q

Draw a Boston matrix

A

Book

51
Q

What is the purpose of the Boston matrix

A

Helps you decide where to allocate investment

52
Q

What are stars

A
  • Stars are high growth products competing in markets where they are strong compared with the competition
  • Often need heavy investment to maintain growth
  • Stars will eventually becomes cash cows
53
Q

What are dogs

A
  • Products that have a low market share in unattractive, low growth markets
  • May generate enough revenue to break even, but are rarely worth investing in
54
Q

What are question marks

A
  • Products with low market share operating in high growth markets
  • They have potential, but will require large investment to grow market share
  • Have to decide which to invest in
55
Q

What are cash cows

A
  • Low growth products with a high market share
  • Mature, successful products with relatively little need for investment
  • Need to be managed for continued profit, to generate cash flows that can be invested in stars and question marks
56
Q

What are some reasons that cash cows are important

A
  • Little need for investment
  • Little need for advertisement
  • Use profit to reinvest in stars and QM’s
  • Good for cash flow
57
Q

What are some benefits of using the Boston matrix

A
  • Identify which products to invest in (stars)
  • Identify products to reduce investment in (cash cows)
  • Identify which question marks to invest in and which to terminate
58
Q

Limitations of Boston matrix

A
  • Doesn’t give figures (market share, growth and profitability)
  • Assumes market share will remain the same
  • Doesn’t identify which question marks are good
  • Doesn’t look at factors other than market share and growth
  • Cash cows often still need investment
  • Qualitative judgements have to be made
59
Q

What is meant by place

A

How the product is distributed

60
Q

What is meant by channels of distribution

A
  • Something that provides a link between production and consumption
61
Q

What are the 5 channels of distribution

A
  • Producer, wholesaler, retailer, consumer
  • Producer, retailer, consumer
  • Producer, consumer
  • Producer, wholesaler, consumer
  • Producer, agent, consumer
62
Q

What are the 3 intermediaries that distribution channels may have

A

Retailers
Wholesalers
Agents

63
Q

What is meant by a retailer

A

The firm responsible for selling the product to the consumer eg shops

64
Q

What are some key trends in retailing

A
  • Growth in out of town stores (retail parks)
  • Decline in independent stores
  • Increased use of technology
65
Q

What is the role of a wholesaler

A

To break the bulk of products from the producer and distribute them to retailers or consumers

66
Q

What are the benefits of wholesalers

A
  • Producers May be too big to deal with retailers individually
  • Help small retailers who are unable to store large quantities
  • Can use own logistics, may gain EOS from these
  • Producer and retailer can focus on their specialist areas
67
Q

What is a limitation of a wholesaler being part of the distribution channel

A
  • Profits have to be shared amongst another intermediary
68
Q

What is meant by an agent

A

A negotiator between the consumer and the producer

69
Q

What are some examples of agents

A

Ticketmaster
Admiral insurance
Hays travel

70
Q

What are some benefits of agents

A
  • Revenue through commission
  • Don’t have to hold stock
  • Reduce need for marketing for producers
71
Q

What is meant by a direct marketing channel

A

When a producer sells directly to the consumer

72
Q

What are 2 examples of direct marketing channels

A
  • Consumer buying eggs from a farmer face to face

- Customer buying iPhone from apple website

73
Q

What is meant by online distribution

A

When a tangible product is bought online and then delivered by means of physical distribution

74
Q

What is meant by digital distribution

A

Delivering goods to the customer via electronic methods

75
Q

What are advantages of online distribution

A
  • Increased geographical reach to customers
  • Lower overheads
  • Can be ordered at all times
76
Q

What are drawbacks of online distribution

A
  • Shipping and returns can be complicated and costly
  • Can often require high initial capital investment
  • Customers May like to see products before they buy them
  • Can increase security threats
77
Q

What are advantages of digital distribution

A
  • No delivery costs
  • Product bought can be consumed instantly
  • No need to hold physical stock
78
Q

Disadvantages of digital distribution

A
  • Not applicable for all products
  • Relies on internet access
  • High costs to launch and run software
  • Costs and difficulty in maintaining security and preventing fraud
  • Have to compete with illegal providers
79
Q

What are the P’s for service marketing

A
  • People
  • Process
  • Physical evidence
80
Q

What is meant by people

A

The people who make contact with customers in delivering the product (customer service)

81
Q

What is meant by process

A

The systems and processes that deliver a product to a customer
Eg self service

82
Q

What is meant by physical evidence

A

The elements of the physical environment the customer experiences
Eg furniture

83
Q

What is drip marketing

A

Automated processes that send a set of messages (usually emails) to customers to move them through the sales cycle (eg new season of clothing)

84
Q

What is viral marketing

A

The use of social media to share an advert like a compute virus

85
Q

What does advertising elasticity of demand look at

A

The extent to which spending on advertising will affect sales

86
Q

What is the formula for AED

A

% change QD/% change advertising cost

87
Q

What does an AED over 1, 1, under 1, 0 and less than 0 mean

A 
Over 1 - elastic
1 - Response equals advertising spend
Under 1 - Inelastic
0 - No effect
Under 0 - Less sales as a result of advertisement
88
Q

Advantages of AED

A
  • Shows how worthwhile advertising is

- Can compare which methods of advertising to pursue

89
Q

Limitations of AED

A
  • Difficult to predict change in demand
  • Percentages don’t show real values
  • Can’t credit increase in sales directly to an advertising campaign
90
Q

What is SWOT

A

A framework for a business to assess its current position in order to make strategic decisions
Proactive rather than reactive
Internal - Strengths and weaknesses
External - Opportunities and threats

91
Q

Advantages of using SWOT for marketing

A
  • Used as a proactive tool
  • Has a logical and simple structure
  • Encourages firms to look at external factors that they may have to respond to
92
Q

Limitations of SWOT analysis for marketing

A
  • Can be too detailed so lacks focus
  • External environment can quickly change so plans become out of date eg coronavirus
  • May be biased when conducted by management who are responsible for strategic issues and don’t realise
93
Q

What are examples of marketing resources

A
  • Marketing budget
  • Department or someone with marketing responsibility
  • Knowledge of the market
  • Set of objectives to be achieved through the marketing plan or strategy
94
Q

What are marketing objectives

A

What a business wants to achieve from its marketing activities

95
Q

What is crucial about marketing objectives

A

That they are related and consistent to overall aims and objectives of the business

96
Q

What is an example of a marketing objective

A

Increase market share by 10% in the next 2 years

Business A Level (16 decks)

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