Marketing Flashcards
(96 cards)
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
2
Q
What is the marketing mix
A
4 P’s
- Product
- Price
- Place
- Promotion
3
Q
What is meant by promotion
A
The collection of techniques used to inform and persuade consumers to buy a product or service
4
Q
What are the 2 types/categories of promotion
A
Above the line
Below the line
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
6
Q
What are some examples of above the line promotion strategies
A
- Television
- Billboards
- Radio
- Magazines
- Cinema
- Sponsorship
- Newpapers
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
8
Q
What is meant by below the line promotion
A
Promotion where the business can directly contact the potential customer
9
Q
Examples of below the line promotion strategies
A
- Personal selling
- Telesales
- Product sampling
- Leaflet distribution
- Trade fairs
- Internet (website)
- Social media
10
Q
How should the advantage of social media being cheaper be referred as
A
More cost effective, not free
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
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
13
Q
What are the 7 pricing strategies
A
- Cost-plus pricing
- Competitor pricing
- Price skimming
- Penetration pricing
- Marginal pricing
- Contribution pricing
- Psychological pricing
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
15
Q
What is meant by competitor pricing
A
Set based on prices charged by a competitor for a similar or identical product
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
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
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
19
Q
What is meant by contribution pricing
A
Setting a price to cover variables costs and make a contribution to covering fixed costs
20
Q
What is an example of when contribution pricing may be used
A
In a hotel In an off-peak time
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
22
Q
What is the formula for price elasticity of demand
A
%change in D/%change in P
23
Q
Interpretation of Ped results
A
Above 1 = Price elastic
1 = Unit elastic
Between 0 and 1 = Price inelastic
0 = Perfectly inelastic
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
25
What is the formula for income elasticity of demand
% change in QD/% change in income
26
Interpretation of income elasticity of demand results
More than 1 = luxury
| Between 0 and 1 = necessity
27
What is the formula for cross price elasticity of demand
% change in D for A/% change in price for B
28
Interpretation of results for cross price elasticity of demand
```
Positive = substitutes
Negative = complements
```
29
What is a use of working out elasticity
Allows firms to find optimal sales price
30
What is a limitation of using elasticities
Prediction of changes in demand, which is even more difficult for a brand new product
31
What does pricing mix mean
Pricing strategy
32
What is the product life cycle
A model describing the stages of level of sales that a product goes through over time
33
Draw the product life cycle
In book 29th jan 2020
34
What is the purpose of the product life cycle
To tack progress to aid decision making at each stage
35
What are the 4 stages of the product life cycle
Introduction
Growth
Maturity
Decline
36
What is meant by introduction in the product life cycle
Researching, development and launching the product
37
What is meant by growth in the product life cycle
When sales are increasing at their fastest rate
38
What is meant by maturity in the product life cycle
When sales are near or at their highest, and growth of sales is slowing down
39
What is meant by decline in the product life cycle
When sales begin to fall
40
What is meant by an extension strategy
A strategy to increase sales when they begin to decline and therefore extend the products life cycle
41
What are some examples of extension strategies
```
Advertising
Price reduction
Add value
Enter new markets
Change packaging
```
42
What are advantages of using the product life cycle
- Aids decision making and planning
| - Can spot trends of past similar products to avoid pitfalls
43
What are some limitation of using a product life cycle
- 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
What is a product positioning chart/market map
A grid that considers 2 important features of the market and where a product can be plotted
45
Why is a product positioning chart useful
Allows business to identify gaps in the market when looking to launch a new product or adapt their existing one
46
What may marketers not aim to fill a gap in the market
A crowded segment suggests that products of this nature have high demand and therefore high sales volume
47
What is meant by a product portfolio
The collection/range of products that a business produce
48
How can a business analyse its own product portfolio
Using a product positioning chart
49
Why do firms want to have a large product portfolio
```
Increase sales
Meet needs of different customers
Spread risk
Increase competitiveness
Increase cash flow
Increase brand awareness
```
50
Draw a Boston matrix
Book
51
What is the purpose of the Boston matrix
Helps you decide where to allocate investment
52
What are stars
- 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
What are dogs
- 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
What are question marks
- 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
What are cash cows
- 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
What are some reasons that cash cows are important
- Little need for investment
- Little need for advertisement
- Use profit to reinvest in stars and QM’s
- Good for cash flow
57
What are some benefits of using the Boston matrix
- 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
Limitations of Boston matrix
- 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
What is meant by place
How the product is distributed
60
What is meant by channels of distribution
- Something that provides a link between production and consumption
61
What are the 5 channels of distribution
- Producer, wholesaler, retailer, consumer
- Producer, retailer, consumer
- Producer, consumer
- Producer, wholesaler, consumer
- Producer, agent, consumer
62
What are the 3 intermediaries that distribution channels may have
Retailers
Wholesalers
Agents
63
What is meant by a retailer
The firm responsible for selling the product to the consumer eg shops
64
What are some key trends in retailing
- Growth in out of town stores (retail parks)
- Decline in independent stores
- Increased use of technology
65
What is the role of a wholesaler
To break the bulk of products from the producer and distribute them to retailers or consumers
66
What are the benefits of wholesalers
- 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
What is a limitation of a wholesaler being part of the distribution channel
- Profits have to be shared amongst another intermediary
68
What is meant by an agent
A negotiator between the consumer and the producer
69
What are some examples of agents
Ticketmaster
Admiral insurance
Hays travel
70
What are some benefits of agents
- Revenue through commission
- Don’t have to hold stock
- Reduce need for marketing for producers
71
What is meant by a direct marketing channel
When a producer sells directly to the consumer
72
What are 2 examples of direct marketing channels
- Consumer buying eggs from a farmer face to face
| - Customer buying iPhone from apple website
73
What is meant by online distribution
When a tangible product is bought online and then delivered by means of physical distribution
74
What is meant by digital distribution
Delivering goods to the customer via electronic methods
75
What are advantages of online distribution
- Increased geographical reach to customers
- Lower overheads
- Can be ordered at all times
76
What are drawbacks of online distribution
- 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
What are advantages of digital distribution
- No delivery costs
- Product bought can be consumed instantly
- No need to hold physical stock
78
Disadvantages of digital distribution
- 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
What are the P’s for service marketing
- People
- Process
- Physical evidence
80
What is meant by people
The people who make contact with customers in delivering the product (customer service)
81
What is meant by process
The systems and processes that deliver a product to a customer
Eg self service
82
What is meant by physical evidence
The elements of the physical environment the customer experiences
Eg furniture
83
What is drip marketing
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
What is viral marketing
The use of social media to share an advert like a compute virus
85
What does advertising elasticity of demand look at
The extent to which spending on advertising will affect sales
86
What is the formula for AED
% change QD/% change advertising cost
87
What does an AED over 1, 1, under 1, 0 and less than 0 mean
```
Over 1 - elastic
1 - Response equals advertising spend
Under 1 - Inelastic
0 - No effect
Under 0 - Less sales as a result of advertisement
```
88
Advantages of AED
- Shows how worthwhile advertising is
| - Can compare which methods of advertising to pursue
89
Limitations of AED
- Difficult to predict change in demand
- Percentages don’t show real values
- Can’t credit increase in sales directly to an advertising campaign
90
What is SWOT
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
Advantages of using SWOT for marketing
- 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
Limitations of SWOT analysis for marketing
- 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
What are examples of marketing resources
- 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
What are marketing objectives
What a business wants to achieve from its marketing activities
95
What is crucial about marketing objectives
That they are related and consistent to overall aims and objectives of the business
96
What is an example of a marketing objective
Increase market share by 10% in the next 2 years
