Marketing Flashcards
Segmentation
Way of grouping customers together that have common characteristics
Methods of segmentation
- Age
- Gender
- Income
- Location
Why is segmentation useful?
- Design product to suit target market
- Ensure marketing mix (4p’s) to suit target market
- Reducing risk of product failing
Market research
Process of finding out needs and wants of customers and actions of competitors
Primary research
First hand information is collected for a specific purpose
Secondary research
Using information that already exists
Types of primary research
- Consumer panel (try out the product)
- Test marketing (launch product in a certain area)
- Observation
- Focus group (discussion group)
- Interview
Types of secondary research
- Internet
- Newspaper
- Government statistics
- Past sales records
- Books
Quantitative
Number data: observations
Qualitative
In depth opinions
Benefits of developing new products
- Attract new customers
- Increase profits
- Improve brand reputation
- Improve customer loyalty
Risks of developing new products
- Expensive (R&D) may not recover
- Could fail - lost invested / other competitors
- Dynamic markets (a market that constantly changes and fluctuates) - impossible to keep up
Product life cycle
Maps a products sales over time
Extension strategy ideas
- Discounts
- New flavour
- Change name, colour, size, shape,
- Packaging - materials
- Weight / portion
- Modify product
- Find a new target audience
- Increasing usage
Stages of product life cycle
- R&D
- Introduction
- Growth
- Maturity and saturation
- Decline
R&D
Extensive primary and secondary market research
Introduction
Major awareness - raising advertising campaign and negative cash flow
Growth
Promotional campaign focusing on product differentiation
Maturity
Product becomes profitable, increasing competition
Decline
Cost-cutting measures and reduced promotional spending
Place
- How product passes from producer to consumer
* Location
Channels of distribution
Producer to consumer
Direct - no intermediaries
Wholesaler
But in bulk and sell do smaller retailers
Retailer
Sell to consumer
Channels of distribution: no intermediaries
Producer to consumer
Channels of distribution: modern
Producer to retailer to consumer
Channels of distribution: traditional
Producer to wholesaler to retailer to consumer
E-commerce
Over the internet
M-commerce
Through phone or tablet
Benefits E/M commerce
- Business, regardless of size, can reach large markets which can increase sales
- Businesses can gather more information on customers and make promotions to suit customer needs which increases sales
Drawbacks E/M commerce
- Greater competition when operating online
* Communication and transport problems when selling to customers all over the world
Benefits and drawbacks of distribution channel: no intermediaries
Benefits:
• Faster
• Cheaper
• Control
Drawbacks:
• Lots of competition
• Ad marketing
Benefits and drawbacks of distribution channel: modern
Benefits:
• Help promote product
• Wider target market
Drawbacks:
• Producer gets less profit
• Higher prices
Benefits and drawbacks of distribution channel: traditional
Benefits:
• Bulk - lower costs
• Appeal to different business
Drawbacks:
• More expensive
• Slower
