Marketing objectives Flashcards
What does ‘marketing objectives’ mean?
- process of identifying, anticipating and satisfying customer needs profitably
How do you calculate market growth (%)?
([new market size - old market size] / old market size) x 100
How do you calculate market share (%)?
(sales / total market size) x 100
How do you calculate sales growth (%)?
([sales this year - sales last year] / sales last year) x 100
What are 3 basic objectives in marketing?
- determine what the market wants
- develop a strategy to achieve this
- deliver marketing actions to achieve the objectives
What are the internal influences on marketing objectives?
- business objectives
- finance department
- human resources
What are the external influences on marketing objectives
- market
- technology
- competitors
- ethics/ environmental
- legislation/ government regulations
How can a market be classified?
- geographical location
- nature of product
- seasonality
- development level
- product destination
How do you calculate market share (%)?
(business revenue / total industrial revenue) x 100
What is market research?
- gathering data about a market
Why is market research carried out?
- spot opportunities
- helps aid decision making
- supports decisions
What is qualitative data?
- opinions
- focus groups/ interviews
What is quantitative data?
- fixed answer
- surveys
What is sampling?
- group of subjects that has been chosen from a larger group, population, for investigation
What effects the value of sampling?
- variety of people
- target market
- qualitative/ quantitative
- sample technique used
- how sample was carried out
What does the size of a sample depend on?
- cost
- time available
- facilities available
- degree of confidence in results
- importance of accuracy
What are the three types of sampling?
- random
- quota
- stratified
What is random sampling?
- names picked randomly from a list
What is quota sampling?
- people picked to fit category
- get opinions directly from people they are targeting
What is stratified sampling?
- population is first segmented into subgroups before are randomly selected from that subgroup
How do researchers avoid bias?
- no leading questions
- more confidence with sample by having a larger representative
- no intimidating tactics during interviews and focus groups
What is correlation?
- method of sales forecasting
- relationship between two variables
- plotted on scatter graph
What is a positive correlation?
one variable increases, causing other to increase
What is a negative correlation?
one variables increases, causing other to decrease
What is a strong correlation?
little room between data points drawn
What is a weak correlation?
data points spread out wide and far from line of best fit
What is time-series analysis?
- method of interpreting marketing data
- over time
- plots actual data
What are trends?
- long term movement of a variable
What types of trends are shown in time-series analysis graphs?
- upward trends
- downwards trends
- constant trends (still has slight fluctuations)
- seasonal fluctuations (can be with upward/ downward trends)
- random fluctuations
What is extrapulation?
- using past data to extend an identified trend
- into the future
- doesn’t always predict correctly
How is technology useful?
- reduce staff costs
- enables two way communication
- increases accuracy and efficiency
- collect opinions globally
- track/ interpret consumer spending habits
- gathers large amounts of data
- reduces human error
How can information be gathered on customers?
- loyalty cards
- social networking sites
- search engines
- WIFI signals
What are confidence intervals?
- used to assess the reliability of sampled data
- plus or minus figure used to show accuracy of statistical results
What is the confidence level?
- the degree to which statistics are a reliable predictor of actual events
- e.g. 95% confident
What are the main factors affecting confidence interval?
- sample size
- population size
- percentage of sample choosing a particular answer
What is price elasticity of demand (PED)?
- measure of how responsiveness demand is to change in price
What will effect if a product in elastic/ inelastic to demand?
- type of product
- availability
- substitute products
- choice
What does price inelasticity mean?
a change in price will lead to a less than proportional change in demand
- between 0 and -1
What does price elastic mean?
a change in price will lead to a more than proportional change on demand
- lower than -1
How do you calculate PED?
% change in quantity demanded / % change in price
What is income elasticity of demand (YED)?
- product demand affected by a change in income
How do you calculate YED?
% change in quantity demanded / % change in income
What does income elastic mean?
if change in demand is higher than the change in income
>1
- positive income elasticity
- fast rate/ high impact
What does income inelastic mean?
if change in demand is lower than the change in income
<1
- positive income elasticity
- slow rate/ low impact
What are luxuries?
- income elasticity more than one
- grows faster when incomes rise
What are necessities?
- income elasticity less than one but higher than 0
- grows slower as incomes rise (still does grow)
What are inferior goods?
- income elasticity below 0
- cheaper value goods
- negative elasticity of demand
What is segmentation?
- dividing a market into different parts to reflect different wants/ needs of customers
What is the process of segmentation?
- income
- geographical region
- ACORN (classification of residential neighbourhoods i.e. post code)
What is demographic segmentation?
- age
- gender
- occupation
- socio-economic group i.e. class (hard to identify)
What is behavioural segmentation?
- lifestyle
- levels of brand loyalty
- benefits sought by consumers
- purchase occasion
- frequency of usage
What are the stages of segmentation?
- segmentation
- targeting
- positioning
