Marketing strategies Flashcards
What is market segmentation?
MARKET SEGMENTATION is the process of dividing a whole market into groups of people who share one or more common characteristics. Once segmented the business chooses a target market.
what is the aim of market segmentation
The ultimate aim is to increase sales, market share and profits by better understanding and effectively responding to the desire of the different target customers – customer centricity.
what are the 4 segmentation variables
Demographic (age, gender, income, education)
Geographic (region, climate, urban/rural)
Psychographic (personality, motives)
Behavioural (purchase occasion, price sensitivity)
What is product/service differentiation?
when products that are similar are made to appear different from and/or better than those of their competitors – creation of products/features that distinguish a businesses good and services from competitors.
what are the 4 points of differentiation?
SEC C
Social and ethical issues
environmental concern
customer service
convenience
What is product/service positioning
the technique marketers use to try to create an image or identity for a product compared with the image of competing products – how the target market perceives the business and its products!!!
What is branding?
A brand is a name, term, symbol, design or any combination of these things that identifies a specific product and distinguishes it from its competition.
Customer benfits of branding
- Helps identify products they like and evaluate the quality of products
- Helps reduce level of perceived risk – a respected brand would provide reassurance
- Gain psychological reward from buying from a brand that symbolises prestige
Business benefits of branding
- Helps to gain repeat sales as consumers are familiar with products and the brand
- Helps encourage consumer loyalty
- Helps differentiate business from competitors
What is packaging? and its functions
Packaging is the development of a container and the graphic design for a product. The functions of packaging include:
o Preserves the product
o Protects the product from damage or tampering
o Attracts consumers attention – assists sales
o Divides the product in convenient units
o Assists with the display of the product
o Makes transportation and storage easier
What are the 3 pricing methods
The first step in pricing is setting a base price.
- cost-based pricing = business determines the cost of production and then adds a markup
- market based pricing = prices are set following the levels of supply/demand in the market
- competition based = prices are set to cover production and operating costs and are comparable with competitors
What are pricing strategies
Once the base price has been set, pricing strategies are used to adjust the base price and refine more depending on marketing objectives, life cycle of product and economic conditions.
- price skimming
- loss leaders
- price penetration
- price points
what is price skimming?
Business charges highest prices possible during introduction stage in order to cover research and development costs. (e.g. APPLE)
What is price penetration?
Business charges lowest possible price for a product to quickly achieve a large market share for a product
- Can be difficult to raise prices
what is price points?
Selling product at only certain predetermined prices to allow customers to find the type of product they need and encourage customers to ‘trade up’ to a more expensive model.
What is loss leaders?
A product sold at or below cost price to attract consumers or sell of unwanted stock.
What is price and quality interaction?
Products that are higher in quality are normally sold for higher prices and vice versa as higher-quality products usually require higher costs.
THIS RELATIONSHIP HELPS FORM THE PRODUCTS IMAGE
What is promotion
the methods used by a business to inform, persuade and remind a target market about its products.
What is the promotion mix and what are the elements of the promotion mix?
The promotional mix is the various promotion methods a business uses in its promotional campaign.
APPS R
ADVERTISING
PUBLICITY AND PUBLIC RELATIONS
PERSONAL SELLING
SALES PROMOTIONS
RELATIONSHIP MARKETING
what is advertising?
A paid, non-personal message communicated to a mass audience through a mass medium. Designed to inform, persuade and remind.
What is personal selling
Involves the activities of a sales consultant directed towards customers in attempt to make a sale (the human aspect of promotion).
o Require sales staff to familiarise customers with the product
what is relationship marketing
The development of long-term and cost-effective with individual customers.
o Aims to create customer loyalty by meeting needs on an individual basis and creating reasons to keep customers coming back.
E.g. loyalty programs – Flybuys
what are sales promotions
The use of activities and materials as direct inducements to customers (e.g. coupons, premiums/free gifts with purchase, free samples, limited time offers, contests and giveaways)
What is publicity and Public relations?
PUBLICITY – Any free news coverage about a business or its products
PUBLIC RELATIONS – Activities aimed at creating and maintaining favourable relations between a business and its customers.
The communication process
Marketing managers must be able to communicate clearly/efficiently to their target market. To avoid miscommunication and increase willingness to purchase a product, businesses can use reliable/respected channels such as opinion leaders (a person with the ability to influence others) and word of mouth (when people infleunce each other through conversations).
What are distribution/marketing channels
DISTRIBUTION/MARKETING CHANNELS – The routes taken to get the product from the business to the customer. This process usually involves a number of intermediaries (E.g. wholesalers).
What are the channel choices for distribution
- Intensive distribution – A business saturates the market with a product (HIGH COVERAGE)
- Selective distribution – Products are available at a limited number of outlets (MODERATE COVERAGE)
- Exclusive coverage – Products are available using only one outlet in a specific geographic area (LOW COVERAGE)
What are physical distribution issues
TRANSPORT – The mode of transportation a business uses will largely depend on the type of product and the degree of service the business wishes to provide.
o The 4 most common methods of transportation are rail, road, sea, and air.
WAREHOUSING – A set of activities involved in receiving, storing and dispatching goods.
o Warehouse are the facilities used to store and move goods.
INVENTORY – Marketers need to ensure they maintain the right balance of inventory to avoid losing sales and market share.
o Businesses may implement an inventory control system that maintains quantities and varieties of products appropriate for the target market.
what is the people element
The nature/quality of interaction between the customer and the those within the business delivering the service.
What is the processes element
Refers to the set of activities the business will follow in its delivery of a service.
- It is important that the processes are carried out efficiently
- They should also be customer-friendly, meaning they’re simple and easy to follow
What is the physical evidence element
Refers to everything a customer sees wen interacting with the business.
- It should create a image of value and quality that inspires consumer confidence in the service experience.
- It can assist a business with positioning an branding and attract its target market
What is E-marketing?
The process of using the internet to perform marketing activities. It provides a faster, more efficient way of doing business and attracting customers.
What is global branding?
The universal use of a name, symbol, or logo to identify a business or its products.
o Provides a consistent image to all customers, which leads to global brand recognition that crosses language barriers (e.g. McDonald’s)
What are the 2 global marketing approaches
STANDARDISATION – Global businesses assume that a product is used in the same way and satisfies the same needs and wants internationally. (E.g. Apple)
o Each element of the marketing mix is the same worldwide.
CUSTOMISATION – Global businesses assume that there are differences between the way a product is used and the needs it satisfies between countries. (E.g. McDonalds)
What is global pricing?
how businesses coordinate pricing policy across different countries.
What are the global pricing strategies
CUSTOMISED PRICING
Customers in different countries are charged different prices for the same product.
- Many businesses use the cost-plus method to cover exporting costs overseas.
MARKET-CUSTOMISED PRICING
Prices are set according to the local market conditions – level of demand/competition.
STANDARDISED PRICING
Customers are charged the same priced for a product regardless of their location.
- It will only be successful if overseas marketing costs remain low.
What is competitive positioning
COMPETITIVE POSITIONING – how a business differentiates its products.
o How a business will stand out and carve out a place in the competitive business environment.
What is competitive positioning
COMPETITIVE POSITIONING – how a business differentiates its products.
o How a business will stand out and carve out a place in the competitive business environment.
