Marketing Process Flashcards
What is a situational analysis?
The situational analysis provides the firm with an opportunity to examine its market situation
The business will note such areas as;
market share of the product
future trends within the market
strategies used by competitors
What are the stages and features of the product life cycle?
Establishment Stage
Begins when the new product is first launched
Sales growth may be low because the businesses is only beginning to create awareness
High prices can help cover costs, but low prices an assist at quick market entry
Growth Stage
Begins when the product attracts a core group of repeat customers
Profitability will grow as sales expand
Businesses may lower prices to deal with increased threat of market competitors
Maturity Stage
Begins when product sales begin to slow
There is a steady income stream with fewer prospects for growth
Businesses must modify their marketing strategies and differentiate the product to ensure success in a market with increasing competition
Post-Maturity Stage
Increased competition and changing consumer preferences create the need for change
The four available paths for a business are decline, renewal, steady state or cessation
What happened when McDonald’s reached the post-maturity phase in the mid-2010s?
In 2014, McDoanald’s moved towards this stage - global sales fell by 7%, profits by 15% and the Guardian suggested customers had “fallen out of love with the company”
This was contributed to increased demand for healthy food and the rise of Five Guys
McDonald’s moved towards renewal, offering new value items and all-day breakfast
This saw same-store sales rise by 5% in 2016, and a 4.5% growth in sales in 2018
What are the strengths and weaknesses covered in a SWOT analysis?
The factors that are developed and controlled from inside the business
Can relate to factors such as: reputation skill/motivation of staff financial stability quality of products
What are the opportunities and threats covered in a SWOT analysis?
Factors that develop from the external environment
A business has very little control over how and when these arise
Can relate to factors such as: level of competition in the marketplace economic conditions substitute products market prices changing tastes and preferences of customers
How does McDonald’s use primary data in its market research?
In November 2005, McDonald’s Australia launched ‘Project Discovery’
The project utilised qualitative research including two-hour, one-on-one interviews with 35 people and telephone interviews with 2,602 people across Australia
A key theme from this research was consumer demand for healthier products
What are three generally accepted marketing objectives?
Increase Market Share
Refers to the percentage of total sales a business has compared with competitors in a market
Increasing market share will increase the business’s sales and profitability
Achieving this allows the business to become stronger & more dominant in the marketplace
Expand Into New Geographic Markets
Some businesses may decide to expand the areas where their goods/services are distributed
Expansion into new markets allows the business to increase its sales
The product to achieves higher levels of awareness among increased numbers of customers
Expand The Product Range
Providing a wider range of products allows the business to target new markets
The new products may not be substantially different from the existing brands, but will be promoted and distributed in a way that reaches new customers
What is McDonald’s three-pronged marketing approach?
Retaining Existing Customers
Regaining Lost Customers
Converting Casual Customers
What are different types of markets, and how does McDonald’s target them?
Target Market - a particular group of consumers for whom a product has been developed
McDonald’s UK claims that it appeals to a wide audience including families and busy workers
Mass Market - the market where products have appeal to all customers; businesses can differentiate products through packaging, price, or loyalty offers
Market Segment - an area of a particular market
The way that products are advertised and promoted suggests that the company applies a market segmentation approach with a primary market including parents with young children, workers and teenagers
Campaigns such as A Little Bit Fancy and table service appeal to older customers
Niche Markets - a market with a specific, narrow customer base
What are the four P’s of the marketing mix?
Product
The good or service that the business intends to provide in the marketplace
Quality, packaging, and position must all be considered
The business must decide if it wishes to offer warranties or maintenance
Price
The cost to the consumer of buying a good or service
Production/distribution costs, desired profit margin & competitor prices must be considered
Low price may encourage sales, but some consumers will perceive the product as low quality
Promotion
The process of creating and maintaining customer awareness of a product
Businesses aim to convince the consumer that they ‘need’ the product
Place
The methods of distribution and availability of the good
Storage, transportation and costs of distribution must be considered
While some goods are readily accessible, businesses may restrict other to generate ‘prestige’
What are the three core strategies of McDonald’s 2017 global growth plan?
Enhancing digital capabilities/using technology to help the customer experience
Redefining customer convenience through delivery
Elevating the customer experience to provide a more personalised visit
What does implementing, monitoring and controlling mean?
Implementation - the process of organising the activities of the business
Monitoring - establishing mechanisms to track progress
Controlling - the process of comparing desired results with planned results
Why is it important to develop a financial forecast?
Financial forecasts provide a level of confidence that marketing expenditure will be justified
It can be difficult to estimate how much business revenue is due to marketing, as they are many external and internal factors that impact the business both directly and indirectly
What is a sales analysis?
Examines the sales of a particular product among different customer groups by sales representatives and during various times of the year
When a business has product depth, a sales analysis can determine which products are performing strongly
Comparing planned/actual sales allows for judging how effective marketing strategies are
What is a market share analysis?
Examines the sales performance of a business and its comparison with direct competitors
Can determine whether the marketing strategies implemented by the business have increased customers, and the extent to which they have come from competitors
