mgt of marketing Flashcards
What is the Boston Matrix?
This enables products to be analysed on market share and market growth
What are cash cows?
Products that have a high market share of a low-growth market
What are dogs?
Dogs are products with Low Market Share and Low Market Growth
What are questions marks?
They are products with high market growth but a low market share
What are stars?
These are products with high growth products competing in markets where they are strong compared with the competition
What are channels of distribution?
The possible routes taken by a product to reach the consumer from the manufacturer
What is consumer behaviour?
This is the thoughts consumers have and the actions they take when purchasing products.
What is consumer audit?
Used by large market research companies to continuously monitor customer habits and influences
What is cost plus pricing?
This involves setting the price by calculating the cost of making the product and then adding on a mark-up for the profit
What is price Skimming?
The price is set high to begin with and lowers over time
What is pricing penetration?
Theo is set low to begin with and increases over time.
What is pricing discrimination?
Prices are altered depending on a discriminatory factor, for example different prices are often changed in the transport industries depending on age.
What is loss leaders?
A promotional price of one or more products is set unprofitably low to entice customers in to buy other product.
Advantages of cost plus?
A quick and easy way of setting the selling price.
Ensures that total costs are covered and a profit is generated.
Disadvantages of cost plus?
Doesn’t cover indirect costs, for example other expenses such as rent.
Doesn’t take external factors into account, for example increasing prices during boom periods to maximise profits.
Advantages of skimming?
Sufficient hype around a new product enables higher prices to be changed, which can increase profits
Lack of competition also allows maximum prices to be charged
Disadvantage of skimming?
High initial prices can put off some customers
Technique results in low initial sales numbers
Advantages of pricing penetration?
Encourages customers to try a new product
The business hopes to gain repeat custom once the prices rises
Disadvantages of pricing penetration?
Very little profit can be generated during the initial low price period
Could result in a price war if competitors set lower prices too
Advantages of prices discrimination?
Ensures products appeal to different market segments
Allows for high profit margins on some price brackets
Disadvantages of price discrimination?
Harder to budget for sales revenue in advance
Loss in potential revenue from selling at a cheaper price
Advantages of loss leaders?
Creates greater footfall, this means that it brings customers into the business
Hopefully customers will by normal-priced products while buying loss leaders
Encourages repeat purchases
Disadvantages of loss leaders?
There is a risk that some customers will only buy the loss leader, impacting profits
What is a diversed port folio?
Involves having products for sale across completely different market segments
What is e-commerce?
A business sells its products using the internet
What is EPOS? (Electronic point of sale)
Information on customer preferences and habits is gathered as loyalty cards are swiped electronically or recorded online
What are extension strategies?
As sales (and profits) begin to fall as a product matures, a business can attempt to inject new life into the product
What is field research?
Involves gathering new information for the business’ exact needs
What are focus groups?
A group of customers is brought together and asked to answer and discuss questions put forward by a market researcher
What is a hall test?
A product is given to customers to try and their feedback is gathered
What is interest free credit?
Retailers offer customers credit to pay for goods at a later date with no interest added on to the price charged
What is into-the-pipe line promotion?
Sales promotions are offered by the manufacturer to encourage retailers to purchase products from them
What is out-of-the-pipe-line promotion?
Sales promotions are offered by the retailer to encourage customers to purchase products from them
What is market growth?
Increase in the number of customers buying a good or service from the business
What is a market leader?
The business that has the most customers in a market
What is the market mix?
Product
Price
Place
Promotion
Process
Physical Evidence
People
What is market lead
Market research is central to market orientation so produces a product that consumers want/need
What is market segmentation?
Breaking down of markets into sub-groups that can be targeted with a specific marketing mix
What is market share?
The proportion of customers that a business has in a market
What is People?
Refers to who is representing a business or a brand
What is physical evidence?
Refers to what customers see that gives them clues about a business from the image it portrays
What is process?
Refers to how a customer receives a service
What is the products of a business?
Refers to what a business sells which can be either a good or a service
What is a product line portfolio?
Involves having a variety of similar products on sale
What is product endorsement?
Involves businesses using celebrities (also known as celebrity endorsement) to promote the product
What is product life cycle? Development
The product is being researched and developed and there are no sales
What is product life cycle? Introduction
The product is launched and sales are low
What is product life cycle? Growth
The product has been on the market for some time, customers are fully aware of the product and are purchasing it.
What is product life cycle? Maturity
The product has been on the market for some time and sales have peaked
Product life cycle - Saturation
The product suffers from too many competitors being in the market and sales fall
Product life cycle - decline
The product’s life is nearing the end and the product will stop being produced
