Marketing - Processes Flashcards
what are the 6 mktg processes?
SMEIDI
- situational analysis
- market research
- establishing marketing objectives
- identifying target markets
- developing marketing strategies
- implementation, monitoring, controlling
what is a situational analysis and what are the 2 parts of a SA
a situational analysis consists of a swot analysis and product life cycle analysis - it is needed to help understand the businesses current position and provided a clear picture of where the business is heading
what is a SWOT analysis
an analysis that involves the identification and analysis of the internal strengths and weaknesses of the business and the opportunities in and threats from the external environment
- includes strengths, weaknesses (internal), opportunities and threats (external)
what is the product life cycle
intro, growth, maturity and decline
characteristics of the introduction stage of the product life cycle
- business tries to increase consumer awareness and build a new market share for the new product
- lower price than competitors to gain market foothold
- directed at early buyers
- more marketing since the product is new
characteristics of the growth stage of the product life cycle
- brand acceptance and market share are actively pursued by the producers of the product
- quality is maintained and improved and support services may be added
- production is maintained as market share and consumer demand grows
- promotion now seeks a wider audience
- distribution channels are increased
characteristics of the maturity stage of the product life cycle
- sales plateau as the market becomes saturated
- features and packaging try to differentiate the product from those of competitors
- price may need to adjusted downwards to hold off competitors and maintain market share
- promotion continues to suggest the product is tried and true
- incentives may be offered to encourage preference over rival products
characteristics of the decline stage of the product life cycle
sales begin to decline as the business faces several options
- product is maintained with some improvement or rejuvenation
- price is reduced to sell remaining stock
- promotion is discontinued
- distribution channels are reduced and product is offered to a loyal segment of the market only
what are some reasons for product decline
- changing public perceptions of what is fashionable at certain times
- new technologies
- fluctuations in economic activity
define market research and why it is importance
= the process of systematically collecting, recording and analysing information concerning a specific marketing problem
differentiate between primary and secondary data (with examples)
primary data = the facts and figures collected from original sources for the purpose of the specific research problem eg. surveys and focus groups
- the main ways of collecting primary data include: the survey method, the observation method and the experiment method
secondary data = facts and figures already collected by some other person or organisation eg. research reports and Australian Bureau of Statistics
- two types of secondary data include external and internal
what are the three steps of the market research process
- determining info needs
- data collection (primary and secondary (internal and external))
- data analysis and interpretation
differentiate between internal and external data (with example)
Internal data = information that has already been collection from internal sources eg. customer feedback, sales and management reports and research reports
External Data = published data from sources outside the business eg. ABS reports, magazines, industry associated newsletters, private data collection agencies
define marketing objectives
= the realistic and measurable goals to be achieved through the marketing plan
define market share
= the businesses share of the total industry sales for a particular product or service
- all mktg plans aim to achieve a specified market share - businesses often develop an extensive product range, using many different brand names to gain an extra few percentage points of market share
why would a business expand their product mix
- increase profits in the long term - the same product mix will not remain effective for long as customer tastes and preferences change over time and demand for a particular product may decrease
define product mix
the total range of products offered by a business
define customer service
the total range of products offered by a business
define target market and differentiate between primary and secondary target market
= a group of present and potential customers to which a business intends to sell its products → customers within the target market share similar characteristics such as age, income, lifestyle, location and spending habits
- primary target market = the target market segment at which most of the marketing resources are directed at
- secondary target market = a smaller and less important market segment than the primary target market
why would a business identify a target market
- allows a business to use mktg resources efficiently - allows mktg campaigns to be more cost effective and time efficient
- makes promotional material more relevant to customer needs and therefore, more likely to be noticed
- allows businesses to refine the marketing strategies used to influence consumer choice
what is a mass market approach
- an approach that seeks a large range of customers
- a mass mktg approach assumes that all individuals in the mkt have similar needs - therefore, the business develops a single mktg mix and directs it at the entire mkt for the product
- One type of product with little to no variation, one promotional program aimed at everyone, one price and one distribution system used to reach all customers
what is a market segmentation approach
- occurs when the total market is subdivided into groups of people who share one or more common characteristics
- Once the market is segmented, the business selects one of these segments to become the target market
- Segmenting a market enables a business to design a mktg plan that meets the needs of relatively uniform group
what is a niche market approach
= an extension of the market segmentation approach is that of the niche market
- Also known as a ‘micro market ‘
what are marketing strategies (more in next chapter)
actions undertaken by the businesses mktg objectives through the mktg mix and include: product, price, place, promotion
what is monitoring
= the process of measuring actual performance against planned performance
- the information collected during the monitoring stage is used to control the plan
what is implementation
= process of putting mktg strategies into operation
what is controlling
= the comparison of planned performance against actual performance and taking corrective action to make sure the objectives are being attained
steps in developing a financial forecast
- estimating the costs of the mktg plan
- estimating the revenue (sales) the mktg plan is expected to generate
how is marketing ROI calculated
mktg roi = (sales growth - mktg costs)/ mktg costs x 1/100
why is market research important?
- businesses are placed in a stronger position and yield better results when they are basing their marketing strategies on accurate, up to date, detailed and relevant information
- by collecting and assessing information about the needs and wants of consumers, a more accurate and responsive mktg plan can be developed and therefore, reduce the risk of mktg failure
what are the three main performance indicators that are used to measure the success of the mktg plan
- sales analysis
uses sale data to to evaluate a businesses current performance and the effectiveness of a mktg strategy - market share analysis
by undertaking a market share analysis, a business is able to evaluate its mktg strategies as compared with those of its competitors - this evaluation can reveal whether changes in total sales, either increases or decreases, have resulted from the business’s marketing strategies or have been due to some uncontrollable external factor - marketing ROI
ROI = return on investment
→ mktg ROI measures how much revenue a mktg campaign is generating compared to the cost of running that campaign - it’s how a business can measure the impact of its mktg strategies on their revenue growth
