Brainscape's Knowledge GenomeTM


Top Flashcards (Certified)
All Flashcards

Business > Markets > Flashcards

Markets Flashcards

1
Q

Markets

A

is any place that buyers and sellers will come together to exchange goods or services. There will normally be an exchange of money at a set price.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Marketing

A

The department tasked with targeting the right product fir the right target market using the right combination of price, promotion, place and product
-About understanding and meeting the needs and wants of the customers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Marketing strategy

A

The actions or plans needed to achieve a corporate objective

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Marketing objective

A

A goal that a business wants to achieve

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Mass Market

A

the attempt to create products or services which is targeted at the whole market or a broad audience

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Niche Market

A

The attempt to create products or services which are targeted towards a specific segment of a market with specific needs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Characteristics of a niche market - product

A

High quality
expensive
low quantity
Luxury

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Characteristics of a niche market - production

A

Batch production

Low production runs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Characteristics of a niche market - price

A

Premium price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Characteristics of a niche market - promotion

A

niche media, more targeted to the needs and interests of customers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Characteristics of a niche market - place

A

direct to customer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Characteristics of a mass market - product

A

Inferior goods
High quantity produced
Quality may be lower

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Characteristics of a mass market - production

A

Factory
production line
flow
low cost per unit - bulk buying

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Characteristics of a mass market - price

A

low price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Characteristics of a mass market - promotion

A

tv adverts

YouTube videos

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Characteristics of a mass market - place

A

Retailers - someone who seeks products to the end customer

direct to customer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Mass market advantages

A

Gain from economies of scale - costs are lower means you have higher contribution per unit- can keep price low
Lots of customers - high potential revenue

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Mass market disadvantages

A

Lots of competitors - struggle to establish start up
Low loyalty - higher PED and sales may be volatile
Homogenous - products need to be differentiated- marketing costs
High volume production not flexible to demand changes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Niche market advantages

A

Fewer competitors
Direct relationship with customers
Strong brand loyalty - low PED- can change premium prices
Specific knowledge skills, easier to target customers
Small scale production can be flexible and follow trends

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Niche market disadvantages

A

Higher risk
Fewer customers
High cost per unit- low economies of scale
Risk of over dependance on single market/product

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Market size

A

this is the total value or volume of sales in the market. Can be measured in monetary terms

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Market size equation

A

Number of units sold in market x price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Market share

A

this is the proportion of total market sales that a firm has

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

How do you workout the market share?

A

(Sales of one firm / total market sales) x 100

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

What is the market share influenced by?

A

marketing focus
economic situation
competitors actions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Dynamic market

A

A market that is constantly changing

-sellers respond to the changing needs or buyers by improving existing products and services or introducing new ones

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Why are markets dynamic?

A 
The environment 
changes in technology 
social trends - fashion 
Competitive environment 
consumer tastes
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Examples of dynamic markets

A

Music
Airline
High street coffee shops
Online retailers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Why do markets change?

A

tastes and preferences
technology
environmental reasons
Competition

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Innovation

A

Is about putting a new idea or approach into action. Practical application of new inventions into marketable. products or services
-commonly described as ‘the economically successful exploitation of ideas’

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Invention

A

Formulation of new ideas for products or processes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Product innovation

A

Launching new or improved products or services into the market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

Process innovation

A

Finding better or more efficient ways of producing existing products or services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Benefits of product innovation

A

Gain a competitive advantage
Differentiates the product allowing them to have a competitive advantage
First mover advantage - when the business is first to the market
Benefits the brand as gives you a strong reputation
Increased market share
Demand would be inelastic to price - only business that offers it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

What is the first mover advantage?

A

higher prices and profitability
opportunity to build early customer loyalty
Enhanced reputation as an innovative company
increased market share

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Benefits of process innovation

A 
Unit costs go down as efficiency increases
improve quality 
more responsive customer service 
greater flexibility 
higher profits
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Role of market research

A

research into competition and how to respond to it
understand customer trends - their needs and wants
technology

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

How do large businesses stay nimble?

A

HR organisation structure
Research and development
Flexible working - zero hour contracts, part time, temp or. full

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Uncertainty

A

Exists when the outcome of a particular situation is impossible to predict

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

Risk

A

Is a known possibility of an unfavourable outcome that can be estimated with probabilities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

What factors cause uncertainty?

A

Actions of competitors
Macro-economic factors - business cycle, inflation
Government - tax, government spending
Dynamic market that are constantly changing
Geopolitical events - wars, natural disasters

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

Market orientation

A

A market orientated approach is an outward looking approach and means a business reacts to what the customer wants. The decisions taken are based around information about customers needs and wants - most successful businesses
-an outward looking approach to new product development where the focus is on what products the consumer wants

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

Product orientation

A

A product orientated approach is an inward looking approach focussing on innovation, means the business develops products based on what it is good at making or doing, rather than what a customer wants. - usually criticised as often leads to unsuccessful products particularly in well-established markets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

What is market orientation informed by?

A

Market research
concentrates on understanding the needs of the consumer and then adapting or producing products to meet these needs
Reduces the risk of new product development
Business has a sensitivity to customer requirements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

Benefits of market orientation

A

Customer loyalty as you are producing to requirements
Reduces risk failure and increases chances of success
Competitive advantage- USP
Brand loyalty
Word of mouth promotion
May be easier to charge a higher price - price inelastic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

Drawbacks of market orientation

A

Higher costs - market research, developing and launching products, costs for training and adapting of production techniques
Can be time consuming
Changing consumer trends

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

What is product orientation informed by?

A

An inward looking approach to new product development where the key focus is on what products can be made and the production process
Informed by scientific research and technical development -research and development
Concentrate on producing high quality products and then later look to create a market for them
Most common with technologically advanced products where the consumer does not have the technical knowledge or insight to realise that this product could exist or that they would want it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

Benefits of product orientation

A 
Save costs from market research 
Don't have to re-train people as there is limited change 
First mover advantage - innovative 
Spend money on research and development 
harder for rivals to copy
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
49
Q

Drawbacks of product orientation

A

May not be high demand
High risk of failure
Often leads to unsuccessful products particularly in well-established market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
50
Q

Why do business collect data?

A

To assess potential demand for a p/d, to see if it will sell and if so how much
To see which promotions would best suit a launch of the p/s
To assess the competition, where do potential customers shop, do they have a substitute or complimentary
To build the customer profile

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
51
Q

Benefits of a business doing market research

A

creates prices that are better suited to the market and customer
less uncertainty - know and understand the market
to react and prepare for changes in the market
to become market orientated
to create a marketing plan based on data

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
52
Q

Primary research

A

the original data gathered by the researcher
info doesn’t exist yet, so can’t be found on internet
will use this data to make specific decisions about the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
53
Q

Primary research methods

A

Questionnaires, loyalty cards, test marketing, interviews, focus groups, observation, consumer panels

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
54
Q

Questionnaires

A

research consisting of series of questions for the purpose of gathering information, open or closed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
55
Q

Interviews

A

A structured conversation where one participant asks questions and other answers - the questions are tailored and based on the answers given

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
56
Q

Observation

A

Where researchers watch how people or consumers behave and interact in the market under natural conditions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
57
Q

Focus Groups

A

Group discussions where customers discuss issues such as there opinions on the product that haven’t been launched yet - one off customers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
58
Q

Loyalty cards

A

Cards that collect data on the shopping habits of their customers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
59
Q

Consumer panels

A

Small groups of consumers discussing their experiences of the business - people who regularly feedback on aspects of the marketing mix, work with them over a long time

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
60
Q

Test marketing

A

Limited launch of product to see how well it sells

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
61
Q

Validity

A

does it tell you anything meaningful

May only uncover consumer views on minor things

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
62
Q

Budgeting constraints

A

gathering and processing data can be expensive
Many firms may lack the expense to conduct extensive surveys
May lack funds to pay specialist market research. agencies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
63
Q

Limitations of market research generic

A

Validity
Budgeting constraints
Time constraints
Reliability of data

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
64
Q

Limitations of market research - time constraints g

A

Takes time to create and analyse data

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
65
Q

Limitations of market research - Reliability of data g

A

depends on the accuracy of the data collected - unrepresentative samples, based interviews

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
66
Q

Advantages of using primary research

A

Directly focused on research purposes
Tends to be more up-to-date
Provides more detailed insights into consumers views

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
67
Q

Drawbacks of primary research

A

Time consuming, costly to obtain, risk of survey bias - may not be representative of the population

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
68
Q

Qualitative research

A

based on opinions, attitudes, beliefs and intentions

Aims to understand why customers behave in a par t ocular way or how they may respond to a particular product

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
69
Q

Drawback of qualitative research

A

Opinions are often obtained from a small group of people so findings may not be statistically valid
costly and time-consuming

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
70
Q

Examples of methods of qualitative

A

Focus groups

interviews

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
71
Q

Quantitative research

A

research based on larger samples and are more statistically valid
Results will be numerical form
Various form of surveys- telephone, email, postal, online

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
72
Q

Secondary market research

A

Uses data that already exists and has been collected by someone else for another purpose
Internal - from the firm itself
External - data that has been published by another organisation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
73
Q

Why do businesses do test marketing?

A

In order to launch a product in a restricted area to see if it is successful before spending money on a national launch

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
74
Q

Secondary market research methods

A 
Annual reports
Internal data 
Government sources 
News 
Trade journals
Market research reports 
EU and International reports
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
75
Q

Secondary market research methods - annual reports

A

backwards look at previous objectives and reports on whether they have been met

  • financial data.
  • used for investors
  • forward look at future objectives
  • Able to see competition in market
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
76
Q

Secondary market research methods - Internal data

A

Data from inside the business

  • sales receipts - see what the best seller is
  • pick up any patterns and trends in data
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
77
Q

Secondary market research methods - Government sources

A

ONS - office of national statistics

  • information on the economy
  • Helps for the business to plan for sales - GDP high or employment
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
78
Q

Secondary market research methods - News

A

business news updates

e.g on competition or suppliers for supply chains

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
79
Q

Secondary market research methods - Trade journals

A

Industry specific management/newspaper

e.g the grocer, marketing week

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
80
Q

Secondary market research methods - Market research reports

A

Specialist market research companies such as MINTEL

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
81
Q

Secondary market research methods - EU and international sources

A

World Bank, WTO, IMF, WEF, CIA fact book

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
82
Q

Drawbacks of secondary data

A

can be outdated

May not be specific to information needed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
83
Q

Limitations of market research

A

Bias, validity, reliability

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
84
Q

Limitations of market research - reliability

A

is the data trustworthy
S - trustworthy original source
P - is the research methodology clear and consistent - sampling method

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
85
Q

Limitations of market research - validity

A

Does the data match what you are looking for

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
86
Q

Limitations of market research - bias

A

Sampling methods needs to represent the whole population you are interested in
Was the data produced by someone with a interest in a particular result

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
87
Q

Use of ICT to support Market Research

A

Websites
Social Networking
Databases

88
Q

Social Networking in market research

A

software can highlight what customers are saying about a brand or product
set up surveys to analyse results

89
Q

Databases in market research

A

Capabilities of modern IT has transformed market research

Easier to learn about customer buying habits

90
Q

What is the purpose of Big data sources?

A

To understand your customer and to tailor advertising products to each customer = customer loyalty

91
Q

Two popular social media research tools

A

Hootsuite

Sproutsocial

92
Q

Market segment

A

A market segment is a group of people with similar needs

93
Q

What are the 4 sections of the population?

A

Geographic, Demographics, Psychographic, behaviour

94
Q

Psychographic

A

Values, attitudes, personality, lifestyle

95
Q

Geographic

A

Region, country, climate

96
Q

Behaviour

A

Why does a customer by a product?
When do they buy it?
Usage rate

97
Q

Niche marketing in market segments

A

Occurs when business focusses on a narrow segment of the market with specific needs

98
Q

Mass marketing in market segments

A

Occurs when a business’ products/services appeals to a wide target market

99
Q

Market positioning

A

Is how an individual products or brands are seen in relation to their competition by the consumers, May stem from pricing, marketing or quality

100
Q

Product differentiation

A

Occurs when businesses make their product a little different from competing products. This may involve giving it unique features

101
Q

Market Map

A

Is the use of a grid showing two features of a market, such as price and quality. Individual brands or businesses are added to the grid to show potential niches or gaps in the market
-Products are compared to. all competitors

102
Q

Gap in the market

A

A business opportunity that no-one else’s fulfilling

103
Q

Market mapping advantages

A

Enables a business to spot gaps in the market

Can help a business differentiate its products from the competition

104
Q

Market mapping disadvantages

A

Can be hard sometimes to categorise the same products and services
Identifying a gap does not mean there is a need for the product
More market research must be done
May be subjective

105
Q

Added value

A

Is the value of the finished good or service over and above the cost of achieving it. This is achieved when a business increases the worth of its factor inputs by creating a new output

106
Q

Factor inputs and the 4 factors of production

A

Land
Labour
Capital
Enterprise

107
Q

Input and output equation for added value

A

Input + transformation process- added value+output

108
Q

Ways to achieve added value

A 
Manufacturing 
Market 
Branding/logo
Technology
Customer service
Unique selling point 
Exclusivity 
convenience
109
Q

Benefits of added value

A

Competitive edge - customer loyalty/ satisfaction
Charge a higher price
Creating a point of difference from the competition
Protecting from competitors trying to steal customers by charging low prices
Focussing a business more closely on its target market segment

110
Q

Marketing mix

A

Promotion
price
place
product

111
Q

Design mix

A

aesthetics
function
costs

112
Q

Marketing mix

A

The combination of facts to help the business to take into account customer needs when selling a product

113
Q

Design mix

A

Refers to the way in which all aspects of a product design are considered, including; function, aesthetics and economic manufacture

114
Q

Elements of the design mix

A

Function
Aesthetics
Economic manufacture

115
Q

Function - design mix

A

The way in which the products perform

  • need to wrk and be reliable and do the job it was designed for
  • if not, may not satisfy customers and may cease production
116
Q

Aesthetics - design mix

A

Refers to the degree of beauty and style as perceived by the user
-some will consider this to be a key differentiating feature and will place precedence over the two areas

117
Q

Economic manufacture

A

The product has to make a profit and must be capable of being manufactured at a cost below the selling price if it to be viable

118
Q

Changes to the design mix

A

Changes are made to reflect the social trends

119
Q

Social trends

A

Refers to the way society as a whole behaves and the values that determine the behaviour
-can alter the relative importance of the different elements of the design mix

120
Q

How is the design mix changing to reflect social trends?

A

Resource depletion
Ethical sourcing
Recycling and reusing
Waste minimising

121
Q

Resource depletion

A

Reduction in the number or amount of resources
When resources start to deplete, the prices increase effecting the economic manufacture
-Non renewable become scarcer and costs increase

122
Q

Resource depletion - sustainability

A

Making a product with affecting long term suppliers of the inputs of the products

123
Q

Waste minimisation

A

Aims to eliminate waste before it is produced and reduce its quantity and toxicity

  • Prevention is the goal, followed by reuse, recycling, treatment and appropriate disposal
  • Helps keep production costs low and reduce environmental footprint
124
Q

Ethical sourcing

A

Not wasting resources or damaging the lives of employees

Consumers avoid buying products associated with child labour or sweatshops

125
Q

Brand

A

A characteristic, name, symbol that distinguishes one product from another supplier

126
Q

Promotion

A

Involves using variety of methods to communicate with customers and persuade them to buy your product

127
Q

Aims of promotion

A

Awareness
Interest
Desire
Action

128
Q

Types of promotion

A

Advertising
Public relations
Sales promotions
Direct marketing

129
Q

Advertising examples

A

Brochures, leaflets, choice of advertising media, radio, tv , print

130
Q

Promotional mix

A

Refers to the combination of different types of promotion. used by a business
The elements must be integrated in a cohesive, consistent and logical manner to achieve the marketing aims of the. business

131
Q

Sales promotion

A

The use of short term incentives to encourage buyers to purchase

132
Q

Examples of sales promotion

A

competitions, vouchers, deals, money off, coupons

133
Q

Factors to consider when sales promoting

A

Costs of competitions
Effectiveness
Consistent with brand image
Likely impacts on sales

134
Q

Public relations

A

Is communicating with the media and other interested parties to enhance the image of the business and its products and therefore increase sales
-costs no money, unless a professional company is hires to carry out PR

135
Q

Examples of public relations

A

Speeches, PR stunts, sponsorships

136
Q

Direct marketing examples

A

Telemarketing, sales people

137
Q

Other methods of promotion

A

Sponsorships, direct marketing, personal selling

138
Q

Sponsorships

A

Association of a product with a popular celebrity or sports person can increase sales and the profile of a product

139
Q

Direct marketing

A

marketing activity that is aimed directly at the customer such as leaflets door to door, direct mail

140
Q

Personal selling

A

Face to face contact with customers

141
Q

pros of advertising

A
  • reach a wide coverage
  • control of the message
  • use the brand to build loyalty
142
Q

cons of advertising

A

-expensive

143
Q

pros of public relations

A
  • can be cheap

- large audience

144
Q

cons of public relations

A
  • bad pr

- cannot control the way the story is covered by media

145
Q

pros of direct marketing

A
  • cheap

- tailored/control who see it

146
Q

cons of direct marketing

A
  • may not get read

- small audience

147
Q

pros of sales promotion

A
  • can entertain and interest the consumer
  • immediate action or purchase
  • can encourage brand switching
148
Q

cons of sales promotion

A

-often short term effects

149
Q

pros of personal selling

A
  • greater engagement
  • build customer relationship
  • two way communication can answer customer queries
150
Q

cons of personal selling

A
  • expensive
  • only reach a limited number of customers
  • luxury items
151
Q

What influence the promotional mix?

A
  • target market
  • social trend
  • stage in product life cycle
  • competition
  • technology
  • costs of promotion
  • finance
152
Q

Branding

A

a characteristic name or symbol that distinguishes one product from another suppliers

153
Q

Product brand

A

brands associated with specific products

154
Q

Service brand

A

brands that add perceived value to services either delivered face to face or via online and apps

155
Q

Umbrella family brand

A

brands that are assigned to more than one product

-makes different product lines easily identifiable by the consumer by grouping them under one brand name

156
Q

Corporate and own label brands

A

promoting the brand name of a corporate entity, as opposed to specific products or services

157
Q

Own label

A

an example of corporate branding where retail outlets sign their corporate branding to a range of goods and services

158
Q

Global brand

A

easily recognised and operating worldwide

-brands are based on familiarity, availability and stability

159
Q

Benefits of strong branding

A
  • awareness of brand and sales
  • perceived added value leading to ability to charge premium price
  • an umbrella brand allows you to launch new products successfully under that brand
  • reduced PED
  • protects against competition, promotes loyalty
  • can sell a brand as it have value on a balance sheet
160
Q

USP

A

how a business can gain competitive advantage by being the only business in the market to offer that product or service

161
Q

What is the goal of advertising?

A
  • focus on USP
  • communicates the functional message and any symbolism or values that consumer might identify with the brand
  • the more the consumer identifies with the brand, the more persuasive the advertising is = sales
162
Q

How to build a brand?

A

USP
advertising
sponsorship
social media

163
Q

social media

A
  • hashtags on twitter are aw way of altering customers following a popular topic that your brand has an association with it
  • events - businesses can take photos and hashtags in some popular events
164
Q

Advantages of a strong brand

A
  • added value
  • brand loyalty
  • brand awareness
165
Q

benefits of social media

A
  • adding and building trust
  • providing value in a fun and creative way through daily content, apps, videos
  • interacting with customers
  • having accountability - dealing with complaints
166
Q

Changes in branding and promotion to reflect social trends

A
  • social media - websites
  • viral marketing
  • emotional branding
167
Q

Changes in branding and promotion to reflect social trends - social media

A

enables users to create and share content or to participate in social networking

168
Q

Changes in branding and promotion to reflect social trends - viral marketing

A
  • a strategy that encourages people to pass on messages to other about a product or service electronically
  • uses social media and online platforms
  • aims to increase brand awareness or to achieve other marketing objectives
169
Q

Changes in branding and promotion to reflect social trends - emotional branding

A
  • refers to the practice of using the emotions of a consumer to build a brand
  • designed to appeal to a customers emotion, human need or perceived aspiration
170
Q

Pricing strategy

A

the approach which a business decides on for setting the price of its products or services

171
Q

Factors that determine the most appropriate pricing strategy for a particular situation:

A
  • number of USP’s - amount of differentiation
  • PED
  • level of competition in the business environment
  • strength of brand
  • stage in the product life cycle
  • costs and the need to make profit
172
Q

Cost plus pricing

A

where the retailer wants to know with some certainty what the gross profit margin of each sale will be
-Full cost plus pricing seeks to set a price that takes into account all relevant costs of production..

173
Q

Pros of cost plus pricing

A

that the business will know that its costs are being covered.

  • takes few resources no need to do market research
  • consistent rate of return
174
Q

cons of cost plus pricing

A
  • This method ignores the concept of price elasticity of demand -business to charge a higher depending on the responsiveness of customers to a change in price
  • the business has less incentive to cut or control costs - inefficient
  • inaccurate budgets can cause loss
175
Q

Price skimming

A

setting a high price to maximise profit when a new product is launched into a market

  • product is sold to different market segments at different times
  • top segment is skimmed off first with the highest price
176
Q

Aim of price skimming

A

-to maximise profit per unit to achieve quick recovery of development costs

177
Q

When is price skimming used?

A
  • works well for products that create excitement amongst early adopters
  • best used in introduction or early growth stage of product life cycle
178
Q

Market conditions required for price skimming

A
  • high quality products and brand image to support higher price
  • enough buyers prepares to pay higher price
  • competitors must be deterred from entering market
179
Q

Penetration pricing

A

offering a product at a very low introductory price

180
Q

Aims of penetration pricing

A
  • to gain market share quickly
  • build customer usage and loyalty
  • build sales of higher priced related items
181
Q

Drawbacks of penetration pricing

A
  • low initial price can create an expectation of a permanent low price - may cause customers to switch making it harder to increase price
  • may just attract customers who are looking for a bargain - low customer loyalty to brand
  • likely to result in retaliation from established competitors, who will try to maintain market share
182
Q

Predatory pricing

A

prices are deliberately set very low by a dominant competitor in the market in order to restrict or prevent competition
-now illegal

183
Q

Psychological pricing

A

Psychological pricing is the business practices of setting prices lower than a whole number. The idea behind psychological pricing is that customers will read the slightly lowered price and treat it lower than the price actually is

184
Q

aim of psychological pricing

A

The aim of psychological pricing is to make the customer believe the product is cheaper than it really is. Pricing in this way is intended to attract customers who are looking for “value”.

185
Q

cons of psychological pricing

A
  • doesn’t guarantee sales

- can make a customer feel manipulated

186
Q

competitive pricing

A

Competitive pricing is a strategy where a product’s price is set in line with competitor prices

187
Q

pros of competitive pricing

A
  • very simple to implement as it requires basic research and insight into who your competitors
  • low risk
188
Q

cons of competitive pricing

A
  • not a long term strategy
  • the business needs some other way to attract customers. It has to use non-price methods to compete – e.g. providing distinct customer service or better availability.
189
Q

cost based pricing

A

the price of a product is determined by adding a percentage in addition to the cost of making the product

190
Q

Benefits of cost based pricing

A
  • easy to calculate
  • prices increases implemented when cost rise
  • mangers can be confident each product is being sold at a profit
191
Q

Drawbacks of cost based pricing

A
  • ignores PED
  • no account of competition
  • profit is lost if price is set below what the customers are prepared to pay
  • sales lost if price is set above the price customers are willing to pay
  • Businesses have less incentive to control costs
192
Q

Factors that determine the most appropriate pricing strategy for a particular situation

A
  • number of USP’s, differentiation
  • PED
  • level of competition
  • strength of brand
  • stage in product life cycle
  • costs and the need to make profit
193
Q

Changes in pricing to reflect social trends

A
  • online sales

- pricing comparison sites

194
Q

Distribution

A

how to get products to the right place for the customer to make their purchase
4ps

195
Q

Key issue for retailers when choosing where to stock

A
  • opportunity cost

- risk

196
Q

Manufacturer

A

-important aspect is whether your product is a planned purchase or whether It is an impulse purchase

197
Q

Impulse purchasing

A

buying in an unplanned way

-implies the need to maximise distribution and to make sure of great displays

198
Q

What is a planned purchase?

A
  • distribution and displays become less important as the customer will look for the item they want
  • therefore the supplier doesn’t need to offer such generous retail profit margins
199
Q

distribution channels

A

the flow that moves a product through the stages from production to final consumption

200
Q

Importance of distribution for retailers

A
  • every part of the shop floor space has an actual cost and an opportunity cost
  • the cost of missing out on the profits that could be generated by selling other goods
201
Q

What are the main channels of distribution?

A
  • traditional physical channel
  • direct to retailer
  • be your own retailer
  • direct online
  • online retail
202
Q

Traditional physical channel

A
  • small producers sell to wholesalers who they sell to small independent shops
  • the profit mark-up applied by the middleman adds to the final retail price
  • a smaller producer cannot afford to deliver individually to lots of small shops
203
Q

Direct to retailer

A
  • large producers cut out the middleman and sell directly to retail chains
  • cost-effective but exposes the server to tough negotiations from the retail chains on price and credit terms
  • large retailers demand the manufacturers pay for special offers and price promotions
204
Q

Be your own retailer

A

-large producers are known for iconic product design and control of their own distribution, displays and sales by running their own shops

205
Q

Direct online

A
  • producer sells directly to the consumers
  • mail order or online
  • makes sure producer keeps 100% of the products selling price
206
Q

Online retail

A

-small firms often lack the ability and finance to build a successful e-commerce sales platform

207
Q

Changes in distribution to reflect social trends

A
  • online distribution

- changing from product to service

208
Q

Changes in distribution to reflect social trends - online distribution

A
  • most shops stock low ranges of sizes aimed at the average 65% of the market
  • the wider range of sizes you keep on shelves or in stockrooms the fewer number of items you will have the room to display or store - opportunity cost -not an issue for online retailers
209
Q

Changes in distribution to reflect social trends - changing from product to service

A
  • selling services has been affected by modern online trends as much as anything else
  • most changes to services is how they are booked which is mostly online
210
Q

Barrier to entry

A

factors that make it hard for firms to break into an existing market

211
Q

e-commerce

A

electronic commerce carried out online

212
Q

Factors affecting distribution

A
  • where do customers buy and who from

- how do they buy

213
Q

multi channel distribution

A

involves a business using more than one type of distribution channel

214
Q

benefit of multi channel distribution

A
  • allows more target market segments to be reached
  • customers expect to be able to buy in different ways
  • higher sales - retailers have no stock but can buy it online
215
Q

drawbacks multi channel distribution

A
  • potential for channel conflict - competing with retailers by also selling direct
  • loss of profit margin to intermediaries such as retailers and distributors - that be retained by selling direct
  • danger that pricing strategy becomes confused for customers

Business (64 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions