Marketing Strategies Flashcards
What is the aim of market segmentation?
strategy 1 in syllabus
to increase sales, market share an profits by understanding and responding to customer desires.
What ways can market be segmented?
strategy 1 in syllabus
- Demographic- dividing the market according to particular features of the population such as size, income and age.
- Geographic- dividing the market according to geographic locations (those in different regions may have different needs, tastes and preferences)
- Psychographic- dividing the market according to personality characteristics, motives, opinions and lifestyles.
- Behavioural- dividing the market according to the customer’s relationship to the product e.g. segmenting the market into users and non users.
What is product/service differentiation?
strategy 2 in syllabus
is the process of developing and promoting differences between the business’s services or products and those of competitors. e.g. when in a grocery store, there are a wide range of breads to choose from such as wholemeal, white, 9-grain, sliced etc.
What are four points of differentiation?
strategy 2 in syllabus
- Customer service- could differentiate by providing after sales service or by providing great presentation of the premises which captures the customer’s interest.
- Environmental concerns- adopting a green philosophy and producing environmentally friendly products can set apart a business as people are becoming more concerned with quality of life issues.
- Convenience- designing convenient products appeals to busy customer’s e.g. providing ready to eat meals
- Social and ethical issues- creating a brand that does not exploit workers or the environment will entice customers.
What is product/service positioning?
strategy 2 of syllabus
the technique that marketers use to try and create an image for a product or service compared to the image of competitor’s product.
* this is how potential buyers perceive the products.
What is a brand?
it is a name, symbol or design that identifies a specific product and distinguishes it from competitors.
What are the benefits of branding?
branding helps consumers to:
- identify the products they like
- evaluate product quality
- reduce the perceived risk of purchase
- gain a psychological reward that comes from purchasing a popular brand
How does branding help businesses?
products- goods/services
- gain repeat sales
- introduce new products as customers are already familiar with the brand
- encourage customer loyalty
What is packaging?
this involves the development of a container and design for a product.
What is the purpose of packaging?
- to preserve the product
- create a positive impression of the product
- encourage first time customers
- attract customer attention
makes storage and transportation easy
to communicate ideas about the product to the customer
What is labelling?
this is the presentation of information on a product or the packaging.
a label contains information on ingredients, operating product or packaging.
*all labels MUST be truthful
What are the three pricing METHODS?
- Cost based pricing- adding a mark up to the cost of producing or purchasing a product
- Market based pricing- is a method of setting prices according to the interaction between the levels of supply and demand. it is what ever the market is prepared to pay.
- competition based pricing- is where the price covers costs of raw materials and operating, and is still comparable to the competitors price.
What are pricing STRATEGIES?
- Price skimming- charging the highest possible price for a product in its induction stage. the objective of this is to recover the costs of research and development as quick as possible.
- Price penetration- charging the lowest possible price for a product. this aims to quickly gain large market share and sell a large number of products during the early stages of the life cycle and discourage competitors from entering the market or taking market share.
- Loss leader- selling a product at or below cost price. this is deliberately done to attract customers to the shop in hopes that extra customers will buy other products as well.
- Price points- selling products only at a predetermined price, regardless of what they cost at wholesale. this means the store would not apply a fixed mark-up to the products. this strategy makes it easier for the customer to find the type of product they need.
- Prestige or premium pricing- is a strategy where a high price is charged to give the product a vibe of quality and status.
What are some promotional strategies?
- Advertising- promoting the products to the customer to entice them and draw them to the business. advertising campaigns is a strategy that is sued when a movie first is released, utilising publicity events, electronic and print advertisements, e-marketing and billboards to attract customers.
- Personal selling- a sales consultant directly attempting to make a sale. personal selling is good as it allows the message to be modified to suit the individual customer, the individualised assistance to the customer can create a long-term relationship, and the consultant can create after-sales service.
- Relationship marketing- aims to create customer loyalty by meeting customer needs on an individual basis, therefore creating reason for customer to come back. this can create competitive advantage.
- Sale promotion- such as coupons, premiums, refunds, samples and point-of-sale displays can entice new customers, encourage trial purchase, and increase sales.
- Publicity- is any free news story about a business’s products. this enhances business image, raise product awareness, highlights the favourable features of the business, and reduces any negative business images.
- Celebrity endorsement- using celebrities in advertisements can draw attention to a business and therefore reach objectives such as increased market share and maximisation of profits.
