Marketing Strategies Flashcards
Marketing Definition
The management process that allows firms to identify, anticipate and fulfil customer needs profitably.
Corporate Objective
How it affects marketing objective - Long term growth vs Short term profitability
Operational Issues
Capacity utilisation, quality targets, productivity
Finance Issues
Retained earnings, High gearing, Budgets, Investment appraisal.
External Constraints
Growth/decline of a market Competitors actions Technological changes Economic Factors Suppliers
Marketing Model
The procedure where businesses make marketing decisions in a scientific manner. Slow/expensive potential for high reward.
Hunches/Guesswork
Actions based on previous experience and limited research.
Sales Forecasting
The target a firm expects to make in terms of volume/sales. Expensive and the potential for mistakes/changes in the external environment.
Ansoff’s Matrix
To evaluate the potential risks involved in strategic decisions.
Current Market/Existing Product
Market Penetration - Low Risk
New Market/Existing Product
Market Development - Medium Risk
Current Market/New Product
Product Development - Medium Risk
New Market/New Product
Diversification - High Risk
Porters 5 Forces
Analyse the nature of competition within an industry.
Threat of New Entrants
Barriers to entry, relative economies of scale, access to suppliers/ distribution. Removal of market share.
Easy to enter
Common Technology, Access to distribution, Low capital requirements, NO strong brands and NO customer loyalty.
Hard to enter
Established brands, restricted distribution, high capital required, economies of scale for acceptable unit costs.
Bargaining Power of Customer
How much customers can exert pressure on price and quality of a product.
Bargaining Customer Help
Amount of customers and the number of firms supplying,
Bargaining Power of Suppliers
The degree of control of which suppliers have over the buyers.
Bargaining Supplier Help
Few large suppliers, scarce resource required, high cost of switching to alternative, few substitute resources.
Threat of Substitute Products
Produced in a different industry but can satisfy the customer needs.
Threat of Substitute Depends
How the price/performance of substitute can match the product, willingness of customers to switch, ustomer loyalty and switching costs.
Degree of Competitive Rivalry
How relatable products from different firms are in the same industry.
Consequences of Competitive Rivalry
Price wars, Investment in innovation/new products, Intensive promotion.
Advantages of a Marketing Plan
All employees know what the business hopes to achieve
Business can take advantage of market opportunities
Enables the business to plan for unexpected events
3 Different Marketing Objectives
- Maintain/increase market share
- Broaden range of products to improve market standing
- Break into a new market or market segment
Internal Influences Marketing Plan
- Corporate Objective - Achieve it
- Size/Type of firm - Larger firms aggressive objectives, small firms less ambitious
- Financial position - Strong cash flow/profitable
- Possession of USP
External Influences Marketing Plan
- Current Market position - Dominant firms build on existing image in new market
- Responses of Competitors - Rivals match actions can determine objectives
- State of economy - Growth/Recession especially luxury items Inferior/Normal good
Scientific Marketing
Gathering as much evidence as possible analyse market / influences, like actions of competitors, consumers, suppliers and governments.
Extrapolation
Analyses past performance and extends trend to the future. Predict growth/decline markets. Inaccurate future may be different to past
Correlation
Analyse the extent of a relationship between 2 variables. No correlation, positive/negative
Moving Averages
Calculations used to identify underlying trends in data, by smoothing out fluctuations
IT and Marketing
Used to collect online research like surveys, cheap data analysis
Test Marketing
Trialling a product in a smaller submarket which is representative of the whole market, geographical, demographic or virtual. Estimate sales/refine product and strategy. Sample too small/rapid industry change.
Cost Leadership
Operate at a low cost and offers a low cost product
Differentiation
Premium product and charges a higher price
International Markets
Diversification/Differentiation strategy. Direct exporting, Overseas Agent, Joint Venture, Foreign takeover
Time Series Analysis
Trends - Predicting the future
Seasonality - Short term fluctuations
Cycles - Periodic changes in patterns
Forecasting Advantages
Budgets - Plan productions levels
Income - Predict timing of income and expenditure cash flow can be calculated
Avoid overproduction - Avoid selling excess stock at low prices
Market Change information -from new business/product
Marketing Plan Advantages
Direction to all employees
Managers compare achievements with the plan take action to be on target.
Planning encourages managers to think ahead to weigh up options to firm and to consider threats / opportunities.
Marketing Plan Disadvantages
Takes time and resources. Dynamic market not beneficial, quick decisions, possibly based on hunches,
Plans might encourage inflexibility in managers not responding to changes in market. Might be easier to change targets than fail achieving them.
