Marketing: Marketing Strategies Flashcards
why is market segmentation importnat
one strategy for the entire market wont effectively meet specific consumer needs and wants
what are the three steps in choosing a target market
- dividing the market into segments
- analyse which segment is most attractive
- choose target market + tailor marketing strategies to them
what is the aim of market segmentation
boost market share, sales and profits by understanding the needs of the target market
what are the four segmentation variables
- demographic
- geographic
- psychographic
- behavioural
define the demographic variable
personal features
eg. age, gender, income
what segmentation variable is the most common
demographic
define the geographic variable
dividing the market based on geographic location
eg. regions, climate, rural v. urban living
define the psychographic variable
dividing the market by psychological factors
eg, lifestyle, motives, personality, socioeconomic
define the behavioural variable
dividing the market by a customers relationship with the product
eg. product knowledge, benefit expectations, loyalty, price sensitivity
define differentitation
the creation of products/features that distinguish a business from its competitors
make it stand out
what are three points of differentiation
eye-catching packaging
better features
value for money
is customer service an example of differntiation of a business
yes
is it beneficial for a business to differentiate themselves through being environmentally-focused, as well as being ethical (not being harmful to people, animals or the planet
yes
is convenience (being able to attain a product easily) a good point of differentiation
yes
define positioning
creating an image for a product or brand that distinguishes it from competitors
how the target market views the business
what are four examples of positioning
price
quality
luxury
safety
what is the process of positioning a product
- decide what position the business wants to create
- develop a marketing mix that will build this image
how would a business reposition a product, and why is it beneficial
how: new packaging, features or promotion
why: regain market share, improve profits
how would a business reposition a product, and why is it beneficial
how: new packaging, features or promotion
why: regain market share, improve profits
what are the three points when discussing product
- tangible v intangible
- branding
- packaging
define product
a good or service thats offered to the market for exchange, with the aim of satisfying a need or want
define tangible products
physical objects that can be owned- goods
eg. car
define intangible products
products that cannot be touched or owned-services
eg. getting a haircut
define the total product concept
receiving both tangible and intangible products simultaneously
define branding
collection of features that identify a product and differentiates it from competitors
eg. logos, slogans
define brand symbol
an image that identifies a business or its products
eg. the golden arches for maccas
why is branding important for customers
- helps in identifying products that they like, so they may continue buying them
- a way to evaluate quality of a product; if buying from a trusted brand they know it is good quality
why is branding important for businesses
differentiates them from others
encourages brand loyalty
what are the three types of branding strategies
- manufacturers brand
- private/house brand eg. coles
- generic brand
define manufacturers brand
owned by the manufacturer and is widely recognised and available
eg. coca cola
define private/house brand
owned by retailers/wholesalers and typically sold at a lower price because their products are cheaper to produce
eg. coles beans
define generic brand
products that dont have a brand name, only the product name and usually sold in plain packaging
what is the function of packaging
protection of product
gains customer attention using bright colours
creates convenience for transporting, storing and using products
define labelling
part of the product or packaging that provides important information
what does labelling consist of
information- eg. use by date, country of origin
promotion- promotes businesses other products
protection- cant protect customers
why is price important to the customer
it indicates value of the product
why is price important to the business
allows business to generate revenue and make profit
what effect does having a product priced too high or low on a customer
high: turn off customers/reduce sales
low: business may not cover costs and may be seen as cheap
what are the main pricing methods
cost based pricing
market based pricing
competitors price
what is the cost based pricing method
calculating total cost of production and adding a percentage for profit
what is the market based pricing method
interaction between quality available and how many customers will buy
what is the competitors price method
selling price over cost though also evaluating competitors pricing
what are the main pricing strategies
price skimming
price penetration
loss leader
price points
bundle pricing
premium/prestige pricing
what is the price skimming strategy
charging the highest possible price for the product during the introduction stage of the life cycle.
what is the price penetration strategy
charging the lowest price possible for a product.
what is the loss leader strategy
sold at or below cost price.
what is the price points strategy
selling products only at pre-determined prices.
what is the bundle pricing strategy
customers gaining a package of goods and services in addition to the tangible good they purchased.
what is the premium/prestige pricing strategy
a high price is charged to give the product a sense of quality and status.
What is the main objective of price skimming?
To recover the costs of research and development as quickly as possible before competition enters the market.
What term is used to describe how price penetration is used to achieve a large market share?
mass marketing
What is the main disadvantage of price penetration?
It is more difficult to raise prices significantly than to lower them. Consequently, a business may be locked into a low sales revenue until it substantially modifies the product at a later stage.
define promotion
describes the methods used by a business to inform, persuade, and remind a target market about its products. To sell more of its products, a business must change customers’ behaviour through information or persuasion.
define advertising
paid, non-personal message communicated through a mass medium. An essential tool for successful marketing.
define advertising media
refers to the many forms of communication used to reach an audience.
define personal selling
involves the activities of a sales representative directed to a customer to make a sale.
define relationship marketing
the development of long-term and cost-effective relationships with individual customers.
define sales promotion
use of activities or materials direct inducements to customers
define publicity
any free news story about a business’s products.
define public relations/PR
are those activities aimed at creating and maintaining favourable relations between a business and its customers.
define promotional mix
the various promotion methods a business uses in its promotional campaign.
define promotion mix
advertising, personal selling & relationship marketing, sales promotion, publicity & public relations.
what is the communication process
a channel used for carrying a message
what is an opinion leader
a person who influences others eg. actors, athletes, celebrities
why do consumers trust word of mouth more than business sponsored commercials
because they place more trust in someone they know, rather than a business
what are the four distribution channels
producer → customer
producer → retailer → customer
producer → wholesaler → retailer → customer
producer → agent → wholesaler → retailer → customer
what are the three channel choices of distribution
intensive distribution
selective distribution
exclusive distribution
define intensive distribution
a business saturating the market with its products. eg. milk, food, lollies (mass marketing)
define selective distribution
using a moderate proportion of possible outlets. eg. clothing, furniture and electrical appliances. (segmentation)
define exclusion distribution
only using one retail outlet for a product in a large geographic area. commonly used for exclusive, expensive products eg. ferraris (niche)
what are the three physical distribution issues
transport
warehousing
inventory
transport as physical distribution depends on..
the type of product and degree of service provided by the business. Most common methods are rail, road, sea and air.
what is warehousing
a set of activities involved in receiving, storing and dispatching goods. A warehouse acts as a central organising point for delivery of products.
why is an inventory control system necessary
to efficiently control stock levels. if a business carries too much stock, it results in lost sales or stock out costs.
what are the 3 extended Ps
- people
- processes
- physical evidence
what is people within the extended Ps
the nature of the interaction between the customer and the employee delivering the service
how do you get “people” right
have qualified staff, and have them trained efficeintly.
should have high customer service
what are processes within the extended Ps
the sets of activities that businesses follow when delivering a service
should processes be easy to follow and simple
yes
what is physical evidence
the environment where the service is delivered
eg. location, furniture, hygiene and music
what is e-marketing
practice of using the internet to perform marketing activities. Customers are having an increasing expectation of businesses having an online presence.
what are advantages of e-marketing
-Effective way to attract new customers
-More convenient
what are disadvantages of e-marketing
-Increased customers=increased competitors
-Competitors sell same products at lower prices
what is a web page
conveys information in the form of a combination of text, graphics, animation and video. The home page often includes basic information about the business- available products, ordering facilities and location.
what is a podcast
Distribution of digital audio or video files across the internet. Is helpful in marketing as many podcasters sell advertising the same way as radio stations. Ads reach the correct audience.
what is a blog
online diary or journal, is informal.
what is an SMS
text messages sent to customers showcasing deals and arrival of goods.
what is social media advertisement
inexpensive, easy to use and monitor, effective in gaining exposure, is accurate in measuring reach of marketing. The main disadvantage is consumers writing negative things online and the company unable to censor it.
what is global branding
the worldwide use of a term/symbol/logo to identify products.
Is cost effective- one ad for a number of locations, name is linked to new products on the market. eg. sony, coca-cola, mcdonalds
what is standardisation
assumes the way a product is used, and that it satisfies the same needs globally. “one size fits all”
what is customisation
assumes the way the product is used, and is altered between countries. It adapts to the needs of the country. Is less used than standardisation.
what are the three ways of global pricing
- customised pricing
- market customised
- standardised pricing
what is customised pricing
products are different prices in different countries. determinant is the cost-plus pricing method.
what is market customised pricing
prices set according to local market conditions. Prices are lower in an area that has competition, than a place where the business has a monopoly.
what is standardised pricing
charging customers the same price all over the world.
what are the risks of standardised pricing
domestic business may undercut standardised price and changes in the exchange rate may negatively impact on the exported price.
