Marketing (unit 2) Flashcards
what is marketing
marketing is a strategic activity which covers all the ways in which the business makes sure that its product, or service, is exactly what people want to buy
what is a market
is a meeting place for buyers and sellers to exchange goods/services for money. it can be a local market, a national market or an international market.
what is the role of marketing
marketing identifys what customer wants, anticipates the customer’s requirements and then attempts to satisfy these requirements
what is market segmentation
is where the market for goods/services can be divided into groups of people who have common charecteristics
what are different types of market segmentation
age- business often target people of a particular age. gender oncome/social class geographical location relgious belive family structure
what are the two types of market research
desk and feild
give examples of each type of research (advantages and disadvantages)
FIELD RESEARCH- involves obtaining first-hand information also known as primary. this involves the researcher going out to the market and obtaining the info themselves. advantages include the info gathered is relevant, it is up-to date, you know its reliability EXAMPLES questionaire/survey, customer pannel, hall test, product test
DESK RESEARCH- is using information which has already been collected and is second-hand, also known as secondary information. it has been collected for one purpose and is used by you for another. advantages include it has already been collected so it is easier to obtain, it is cheap to gather EXAMPLES financial reports, governmant publoications, general publivcations.
what is the marketing mix
product
price
place
promotion
Describe Product life cycle
The product life cycle shows the different stages a new product passes through over time and the sales that can be expected at each stage.
Introduction- high costs for research and development, advertising and promoting, low sales and profits, few competitors, relatively high prices
growth- sales rise rapidly, profits show and price softens, competition appears, unit cost declines and mass market emerges
maturity- sales rise but more slowly, profits begin to level as competition grows, prices become very competitive and may even fall
decline- market becomes saturated-supply greater than demand, customer tastes change and more advanced products are launched, sales decline permanently and profits are low or zero, product is withdrawn
describe branding
branding can be very sucessful maketing tool, and is widely used by businesses to create unigue selling points. The business chooses a word or symbol, or both, then registers them so that they can only be used on its products. it then designs a marketing strategy to distinguish its products from all other similar products by using the brand. Baxter’s, cadbury’s and Heinz are all well-known brand names. Using branding, you can create a form of Product differentiation
Give advantages and Disadvantges of branding
ADVANTAGES
- instant recognition
- brand loyalty is built up
- customers believe its better quality than its competitors so the business can charge premium prices
- allows the brand-holder to launch new products using the same brand name.
- brands can convey an image onto the consumer, and if successful can lead to a ‘snob value’ that makes the customer that owns the product look ‘cool’
DISADVANTAGES
- It takes a great deal of toime to establish a brand.
- a single bad event with bad publicity can affect the whole range of same-branded products.
- you have to be able to protect your brand name worldwide and this can often be difficult with huge markets producing ‘fake’ product.
- major brand manufacturers who can charge premium prices for their products suffer most at the hands of the forgers.
- brands which develop through fashion can suffer badly when fashions change
Describe price
the price is the actual amount paid for the product/service by the consumer to the seller
give factors which you have to think about when deciding on a price
- the companys objectives
- competitors prices
- the postion of the product in its life cycle
- the cost of manufacturing
- the time of year, if the company offers summer/christmas sales or if the product is seasonal
- the level of advertising and promotion
- the profit level of expected
- suppliers prices
describe the three types of long term pricing stratagies
LOW PRICE
a lower price than those of competitors is charged where there is price elasticity of demand. This means that consumers respond positively to changes in the price, and lower prices will result in much higher sales. It is impotant where there is little brand loyalty and competition in the market is high. For example, supermarkets have high sales of DVDs and CDs due to lower prices
MARKET PRICE
a price set at market rate means that your prices are broadly in line with those of competitors. It is usual in markets where price competition does not brenefit any of the businesses, such as in the petrol market where there are a few large companies, with very little difference between the competitors products. They tend to compete on things other than price, such as offering air miles
HIGH PRICE
A price is set high by businesses offering high-quality, premium goods and services where image is impotant, such as in perfumes.
Name the six types of short term pricing stratagies
skimming priceing penetration pricing destroyer pricing promotional pricing demand-orientated loss leaders
Describe three short term pricing strategies
PROMOTIONAL PRICING
prices are reduced for a short period of time. This strategy is used by a company that wants to inject new life into a product or reduce stock levels quickly.
SKIMMING PRICING
this happens when a company launches a new more sdvanced product. the high start price allows the company to take in large profits at the start and recover some of the reseach money that was lost. it also covers design costs before competitors enter the market. As competition increases, the price will gradually fall.
DEMAND_ ORIENTATED
some companies charge different prices for the same product according to the time of day. For example BT charges different prices for a telephone call at different prices for the same holiday according to the time of year.
what is meant by place
this is the where the organisation makes its goods and services available to its customers. It doesn’t have to be a physical place, but rather how the product gets to the consumer.
what is direct selling
internet selling mail order direct mail newspaper selling personal selling
what is retail selling
indepent store supermarket chain store department store discount store
what are wholesaler
a wholesaler purchases goods in bulk, directly from a manufacturer and then sells in smaller quantities to retailers and other businesses (breaks bulk). examples of wholesalers include Booker, marko, an Costco.
Manufacturers sell product to wholesaler because
-it saves the manufacturer from making many small deliveries to individual retailers, therefore saving on transport, admin and sales rep costs.
-it saves the manufacturer from high stock holding costs
-it saves the manufacturer from being left with stock if customer tastes or fashions change.
Name the four methods of distribution
road
rail
air
sea
give two advantages and diadvantages of each
ROAD
ad- cheap compared to other methods
- quick
Dis- larger items cannot be transported as easily
- less green and environmentally friendly
RAIL
ad- can transport large products
- can transport fairly large quantities can be transport
dis- rail links are not available in every location
- not a door to door service
AIR
ad- products can be transported across the world fairly quick compared to sea
- large amounts of small products can be distributed
dis- large items cannot be transported
- products still need to be transported to an airport which could be expensive
SEA
ad- larger products can be distributed
- products can be distributed across the world
dis- it could take a long time for goods to arrive in far away destinations
- not a door to door service
describe three factors you should think about when locating your business
WHERE THE CUSTOMER IS
there is no point in setting up a business in a place where there are no customers. market research will help to identify where customers exist and where the business could locate to meet the needs of these customers
EMPLOYEE AVAILABILITY
employees be may needed to work in the business and therefore employees with suitable skills need to be available nearby.
AVAILABILITY OF SUITABLE PREMISES
the business might need a certain size of shop or a shop with certain facilities. There might only be premises available in certain places
COMPETITION
a business might want to set up as far away as possible from its competition or it might want to be as close as possible to try and increase their market share
what is meant by promotion
is the process by which people are encouraged to buy your product rather than that of a competitor
what are the three aims of promotion
PERSUADING customers to buy a product
INFORMING customers about the product
REMINDING customers that the product still exists
what is advertising
it makes customers aware that a product exists. it includes information about the product and tries to encourage people to buy it. advertising is important to increase sales because customers cant buy a product if they dont know it exists
describe four types of advertising
INTERNET WEBSITES is a collection of information in one place. It can be accessed by typing a website address into an internet browser.
QUICK RESPONSE CODES can also be used to direct people to a business website. a QR is a bar code. When it is scanned using a tablet computer or smartphone, it takes a person to a website.
TEXT MESSAGING is widely used by business to communicate and promote products to customers. Specific customers can be targeted quickly with information.
E-MAIL to send mail shots to customers. Customers can sign up to a mailing list and be emailed with details of special offers, new products and other promotions.
what does the choice of advertising media depend on?
the product to be advertised the market segment to be targeted the type of coverage required the advertising budget available how competitors advertise their products how technical the product is the size of the organisation legal restrictions
How is ICT used in marketing?
INTERNET- websites can be set up to advertise products an allow customers to buy on-line
SPREADSHEET- used for analyzing sales figures and producing graphs
DATABASE- customer information held, reports produced for market segments. Information on competitors and their products held
DESKTOP PUBLISHING/GRAPHICS is used to produce advertisements, graphs and charts of sales figures, pictures and posters for customers, leaflets to advertise products etc.
