Marketing - Strategies Flashcards
define market segmentation
involves dividing the total market into groups of people who share one or more common characteristics
what is the aim of market segmentation
The ultimate aim of market segmentation is to increase sales, market share and profits by better understanding and responding to the desires of the different target customers
what are the 4 main ways to segment a market
demographic, geographic, psychographic, behavioural
define geographic segmentation
the process of dividing the total market according to geographic locations
- businesses may need to divide the consumer market into regions because consumers in different geographical locations have different needs
define demographic segmentation
the process of dividing the total market according to particular features of a population eg. size of the population, age, sex, income, cultural background and family size
define psychological segmentation
the process of dividing the total market according to personality, characteristics, notices, opinions, socioeconomic group and lifestyles
- focuses on why people behave the way they do
define behavioural segmentation
the process of dividing the total market according to the customers relationship to the product
- this includes customers knowledge of, attitude towards or benefits sought from the product
- Identifying what customers want from the product is an important aspect of behavioural segmentation - by determining the benefits desired, marketers can design products that directly satisfy these needs
what is product and service differentiation
Occurs when products that are the same or similar are made to appear different from and/or better than those of competitors
- by achieving this, the seller is able to gain a little more control in the marketplace, especially with price
what is product/ service positioning
the technique in which marketers try to create an image or identity for a product compared with the image of competing products
- REpositioning focuses on changing what customers associate with the brand and sometimes competing brands.
what are some of the main differentiation points
-customer service
- environmental friendliness
- convenience
- social and ethical issues eg. ethical consumerism, fair trade movement
define product (in terms of the mktg mix)
goods or services that can be offered in an exchange for the purpose of satisfying a need or want
define total product concept
the tangible and intangible benefits (attributes) a product possesses → most products are combinations of tangible and intangible services
what are the main aspects of product
branding and packaging? NOT SURE THIS MIGHT BE BS
define branding
name, term, symbol, design or any combination of these that identifies a specific product and distinguishes it from its competition
benefits of branding
- helping customers: identify specific products they like, evaluate quality of products, reduce their level of perceived risk of purchase and gain a psychological reward that comes from purchasing a brand that symbolises status and prestige
- can help increase repeat purchases because consumers recognise products and are already familiar with the business
what are the main branding strategies
manufacturers brand, private/ house brand, generic brands
define packaging
the development of a container and the graphic design for a product
what are the benefits of packaging
- Well designed packaging gives a positive impressions of the product and encourages first time customers
- Packaging also preserves the product, protects the product from damage, assists with the display of the product and makes transportation and storage easier
Labeling = the presentation of information on a product or is package
→ Marketers can use labels to promote other products or to encourage proper use of products and therefore greater consumer satisfaction with products
what are the three main pricing methods
cost based pricing, market based pricing, competition based pricing
define price
the amount of money a customer is prepared to offer in exchange for a product
define market based pricing
a method of setting prices according to the interaction between the levels of supply and demand
→ when demand for a product is greater than its supply, there will be a shortage in the market = price increases
→ when the supply of product is greater than its demand, a surplus will exist in the market = price decreases
define cost based pricing
a pricing method derived from the cost of producing or purchasing a product and then adding a markup
- price = cost + cost markup percentage
benefits of market based pricing
benefits of cost based pricing
→ drawbacks include: difficult in accurately determining an appropriate makeup percentage as well as the fact that the product is priced after production and associated costs are incurred without taking into account the other elements of the marketing mix or the state of the market
define competition based pricing
here the price covers costs (cost of raw materials and the cost of operating the business) and is comparable to the competitor’s price
benefits of competition based pricing
→ often used when there is a high degree of competition of businesses producing similar products - once a business has established a base price, they can choose a price below, equal to or above that of competitors
what are the 4 main pricing strategies
price skimming, price penetration, loss leader, price points
define price leader
a major business in an industry whose pricing decisions heavily influence the pricing decisions of its competitors
what is the interaction between price and quality
The perceived price–quality relationship helps determine the image customers have of products or brands
If a business charges a low price for a product, customers may perceive the products as cheap
define promotion
the methods used by a business to inform, persuade and remind a target market about its products
what is the promotional mix
advertising, personal selling and relationship marketing, sales promotion and publicity and public relations
define advertising
a paid, non-personal message communicated through a mass medium → essential tool for successful mktg
benefits of advertising
- it provides businesses with the flexibility to reach an extremely large audience or to focus on a small, distinct target market segment
define personal selling and relationship marketing
the activities of a sales representative directed to a customer in an attempt to make a sale + the development of long-term and cost- effective relationships with individual customers
→ a highly effective relationship mkt strategy is loyalty programs
define publicity
the use of activities or materials as direct inducements to customers + any free news story about a business’s products
→ aims to entice new customers, encourage trial purchase of a new product and increase sales of existing customers and repeat purchases
→ Special promotion examples may include: limited time offers, free gifts, samples, refunds
define public relations
activities aimed at creating and maintaining favourable relations between a business and its customers
Four main ways that PR can assist a business =
-Promoting a positive image
-Effective communication of messages
-Issues monitoring
- Crisis management
what are the main aspects of the communication process
define opinion leaders
a person who influences others and whose opinions are respected
Word of mouth communication = when people influence each other during
define place/ distribution
activities that make the products available to customers when and where they want to purchase them
define distribution/mktg channels
the routes taken to get the product from the factory to the customer
what are the 4 most commonly used channels of distribution
- Producer to customer
- Producer to retailers to customer
- Producer to wholesaler to retailer to customer
- Producer to agent to wholesaler to retailer to customer
define market coverage
the number of outlets a firm chooses for its products
what are the three main channel choices
intensive, selective and exclusive
define exclusive distribution
the use of only one retail outlet for a product in a large geographic area. This method of distribution is commonly used for exclusive, expensive products.
define selective distribution
involves using only a moderate proportion of all possible outlets. Clothing, furniture and electrical appliances are often distributed using this method. The customer is prepared to travel and seek out a specific retail outlet that stocks a certain brand
define physical distribution
all those activities concerned with the efficient movement of the products from the producer to the customer
what are physical distribution issues
define people
refers to the quality of interaction between the customer and those within the business who will deliver the service
define processes
refers to the flow of activities that a business will follow in its delivery of a service
define physical evidence
refers to everything a customer sees when interacting with a business - this could refer to the physical environment experienced by the customer or the materials needed to carry out the service such as signage, business logo or brochures
- Customers make judgements about the business based on these features
- Physical evidence can assist a business with its positioning its brand and attracting its target market
what is e marketing?
the practise of using the internet to perform mkt activities
- E mktg technologies include webpages, podcasts, electronic messages, blogs, location based marketing and social media advertising
advantages of e marketing
Provides a faster, more efficient way of doing business and can be a very effective way of attracting new customers
define global marketing
A businesses mkt plan must be modified and adapted to suit overseas markets
All businesses marketing on a global scale need to rely on market research to understand the complexities of the global marketing environment before they can design the marketing mix
what is a transnational corporation
any businesses that have production facilities in two or more countries and that operate on a worldwide scale
what is a standardised approach
a global marketing strategy that assumes the way the product is used and the needs it satis es are the same the world over
benefits of a standardised approach
- Cost savings
- Production runs can be longer, thereby achieving economies of scale
- R&D costs are reduced
- Promotional strategies can be standardised
what is a customer/ global approach
a global marketing strategy that assumes the way the product is used and the needs it satis es are different between countries
- Adopting this philosophy requires the mkt plan to be customised according to the economic, political, and socio cultural characteristics of the target country
benefits of a customer/local approach
define global pricing
how businesses coordinate their pricing policy across different countries
define competitive positioning
how a business will differentiate its products
- It centres on how a business will carve out a place in the competitive marketing environment
- Ultimately, to develop and maintain a competitive position in an increasingly challenging environment, businesses must gain a deep understanding of their dynamic environments in which they operate, and form their strategies according to evolving conditions
to differentiate successfully, and avoid competing on price only — a difficult situation to sustain over the long term — the business should strive to develop product leadership, positive customer relationships and operational excellence
define price skimming
when a business charges the highest possible price for the product during the introduction stage of its life cycle
→ assumption that some consumers are willing to pay a high price for a products novelty features because of prestige or status that the ownership gives eg. apple
→ The objective is to recover the costs of research and development as quickly as possible, before competition enters the market
define price penetration
when a business charges the lowest price possible for a product or service so as to achieve a large market share
→ also known as mass market pricing
→ The objective is to sell a large number of products during the early stages of the life
define loss leader
a product sold at or below cost price - for many businesses, especially retail stores deliberately sell a product at a loss to attract customers to the shop
define price points
selling products at only predetermined prices - mainly used by retailers, especially clothing stores and boutiques
define intensive distribution
when the business wishes to saturate the market with its product. Customers can shop at local outlets and be able to purchase the product. Many convenience goods, such as milk, lollies and newspapers, are distributed this way
