Module 2/ Marketing Flashcards
What is Marketing?
Marketing is the process of planning and executing the development, pricing, distribution, and promotion of products and services to meet customer needs.
What is ‘Value added’?
Value-added is the additional features or economic value that a company adds to its products and services before offering them to customers. It will allow them to Charge a higher price if necessary, Gain a competitive edge over other players in the market, Benefit from customer loyalty.
What is exchange transactions?
It involves the transfer of something, whether tangible or intangible, between two or more people to receive something in return
What are the MARKETING CONCEPTS?
Production concept
This marketing concept is probably the oldest to be practised.
It is based on the notion that the business should produce products it produces best.
Product concept
it was believed that consumers will demand products that are of high quality, give excellent performance and contain innovative features.
Sales (selling) concept
The main focus is not on whether the firm could mass-produce the product, but on how well it could convince customers to buy
Marketing Concept
The marketing concept therefore holds that, in order to achieve its organisational goals, the firm should ascertain the needs and wants of its potential customers and fulfil their desired satisfaction more effectively than competitors.
Societal marketing concept
Companies were therefore encouraged to promote social and ethical considerations in the production and the marketing of their products
What is the Micro Environment?
The micro-environment of a firm refers to the factors
within its immediate environment that impact its
performance, decision-making process and ability to serve
its customers. These include:
Suppilers
Competitors
What is the MACRO Environment?
The macro-environment of the firm refers to the external
and uncontrollable factors which impact on its performance,
decision-making process and ability to serve its customers.
These are larger societal factors that the firm cannot control
What are Marketing Intermediaries?
Marketing intermediaries assist the firm in promoting, selling and
distributing its products to the final customers. They play
a vital role in the distribution process and so should be of
utmost importance to the Marketing Manager
4 types of MARKETING INTERMEDIARIES?
Resellers
These are firms that purchase the manufacturer’s products
with the intention of reselling them. They include wholesalers and retailers
Physical distribution firms
These firms help to stock and transport goods from one location to the designated destinations.
Marketing services agencies
These agencies or firms offer their services to other firms and act on their behalf. They include marketing research agencies and advertising agencies, among others.
Financial intermediaries
These firms focus on offering finance to buy the firm’s products or insuring the products that are purchased. Financial intermediaries would include banks, insurance companies, credit unions and other financial institutions.
What are some other factors that affect MARKETING?
Economic factors
Economic factors may be defined as those influencing
consumer spending patterns and purchasing power. These
would include economic growth rates, inflation rates,
distribution of income and exchange rates
Natural factors
Natural factors refers to the natural resources that
are used as inputs into production. This includes all the
different variations of the factors of production – that is,
land, labour, capital and entrepreneurship.
Political factors
Political factors would include the laws and regulations
that influence the operations of a firm in an industry.
The political environment can be extended to include
the different pressure groups
Cultural factors
Cultural factors become even more important when
the firm is operating within different countries. While
most Caribbean countries would have similarities in their
culture because of their heritage, there is still some amount
of diversity
What are the steps in Marketing Research?
Stage 1: Management problem identification- If the problem cannot be identified or if it is not clearly defined, it could result in valuable time and resources being wasted
Stage 2: Research objectives
The research objectives outline what is to be achieved by
the research. They give a clear guide to the way forward.
Both management and the researcher have to ensure that
these objectives correlate with the problem statement.
Stage 3: Data collection
This stage can have a serious impact on the result of the
marketing research. The researcher has to ensure that
sufficient and credible information is collected, upon which
a decision can be taken or a generalisation made
Stage 4: Sampling
Conducting research on an entire area can pose a number
of challenges for the researcher
Stage 5: Research techniques
Stage 6: Analysis and presentation of data
Limitations in Marketing Research?
Market research is time consuming and so the final
result might be out of date by the time it is published
If the sample is not properly chosen, the result can be
biased
A proper marketing research campaign can be very
costly for the firm and it may be inconclusive in the end
The final decision is based on value judgements and
probabilities and so is not 100 per cent accurate
What is Market Segmentation
Market segmentation is the division of the market into subsets
or segments of potential customers who have similar buying
behaviour and characteristics.
Advantages and Disadvantages of Marketing Segmentation?
The firm can make better use of its limited resources
and in the process reduce waste
A firm may choose to cater for one segment rather than
the entire market
Knowing the needs of each segment can save money
that would otherwise be spent on promotion campaigns
dis-
Researching information about each segment can result
in very high administrative costs
The firm may forgo revenues by focusing on just one or
two segments
Producing products for each segment can rapidly
increase the number of products, some of which may
be costly to produce. This could also lead to market
saturation.
What is Mass Marketing?
Mass marketing is also referred to as ‘undifferentiated
market’. It is where the firm does not practise segmentation
but rather markets the same product to the entire customer
base
What is Niche Marketing?
Niche marketing is also known as ‘concentrated
marketing’. This strategy is one where the firm identifies a
small segment of the market and creates a marketing plan
to satisfy that segment
What is Target Marketing?
Target marketing involves the division of the market into
different segments for the firm to target. The firm may cater
for one or more of these segments with the use of different
strategies to reach them
Factors that influence BUYING BEHAVIOUR
Culture
Perception
Level of income
Personality
What is a PRODUCT?
A product is any item or service that is offered for sale to
the market with the aim of satisfying a consumer’s needs or
wants.
What are the 3 things that cause the product to be a success?
The core product
The core product represents the actual benefit that a
consumer is seeking from the purchase and use of the
product.
The actual or formal product
The actual product focuses on the attributes or features
of the product. More than likely, these features will be
the differentiating factor between this product and other
products. (EG: Laptop specs)
The augmented product
The augmented product focuses on the additional benefits
and services that the consumer receives from purchasing. and using the product. It represents the post-sale benefits
or features associated with the product. (This may include
such things as after-sales service, warranty, delivery and
installation)
What are the DIMENSIONS of the product mix?
Breadth or width
The breadth of the product mix measures the number
of product lines or different products that the firm has. It
shows the level of diversification within the firm and its
ability to manufacture and/or sell different products.
Depth
The depth of the product mix relates to the variations
or features of each product line. It includes such aspects
as model, sizes, design, colour, flavour, etc
What is a product LINE and EXTENSION?
A product line represents a group of products, offered by a
firm, which has similar characteristics and similar intended
use.
Product extension, also known as product line extension, is a marketing strategy that involves introducing new products or variations of existing products to an existing brand
What are the STAGES of the NEW PRODUCT DEVELOPMENT PROCESS?
The seven-stage new product
development process consists of the
following steps: idea generation; idea
screening; concept development and
testing; business analysis; develop
prototype; test marketing; and
commercialisation
What are the STAGES of the product lifecycle?
Introduction
The first stage of the product lifecycle begins with the
commercialisation or launch of the product as was discussed
earlier under the new product development process.
Growth
This stage is characterised by increasing sales and profits
as the firm’s promotion efforts take effect in the market.
Maturity
By this time the product is well known in the market and
has reached or has almost reached the point of market
saturation
Decline
Eventually, a product will reach this stage at some time in its
life. This is where the product’s sales fall and profits decline.
What is Branding?
Branding occurs where a firm places its name, mark, symbol and/or design on its product. This acts as a means of identification and helps consumers to differentiate the product from others
What is a TRADEMARK?
A trade mark can be a brand or part of a brand which the
firm has the legal right to use exclusively. Any infringement
of such a mark can lead to lawsuits.
What is a SERVICE?
A service, however, is an intangible economic activity that cannot be stored and is received by the consumer at the point of sale
What are the CHARACTERISTICS OF A SERVICE?
Intangibility
Inseparability
Variability
Perishability
What is a PRICE?
A price is the value that is placed on a product. It is the
amount of money that the firm requires the consumer to
pay in order to acquire the product or service
What is the IMPORTANCE of PRICING?
The price attached to the product
is often as a result of the objective
that the firm hopes to achieve. These
objectives may include: profitability,
volume, meeting competition, social
and ethical, the status quo and
utilisation of capacity
What INFLUENCES PRICING?
A firm’s pricing decision may
be influenced by demand, price
elasticity of demand, income, costs,
consumer preference, stage of the
product lifecycle and government
policy
What is PRICE ELASTICITY
Price elasticity is a marketing term that measures how much a product’s price affects consumer demand
What are some PRICING STRATEGIES?
‘Cost plus’ pricing
‘Cost plus’ pricing is sometimes referred to as ‘mark-up
pricing’ and is a cost-based pricing strategy. This is where the
firm arrives at a price for the product by adding a percentage
or an amount to the unit cost of the product
Competition-based pricing
Competition-based pricing is a method that seeks to
price the product based on the firm’s competitors’ prices.
This strategy is particularly appropriate for firms who are
selling similar products and are involved in price competition
or ‘price wars’.
Penetration pricing
This strategy is best suited to a new firm that is trying to
secure a share of the market upon entrance or the launch
of a new product in an existing market. Penetration pricing
occurs where a low initial price is set by the firm in order to
generate sales.
Price Skimming
The price skimming strategy is somewhat opposite to
the preceding one. It is often used for the market entry
of a new product.However, unlike penetration pricing, a
high initial price is charged upon entrance into the market
What are some Factors influencing distribution decision?
Cost
The size and policy of the company (Small firms may find it difficult)
Type or nature of the product
The size of the market (the larger the market is, the greater
will be the need for more distribution outlets)
Government policy
Types of Distribution Channels
Direct distribution channel/ Zero level
A direct channel is one where the product is distributed or
sold by the firm to the consumer without the use of any
intermediary or middleman.
Indirect distribution channel
An indirect channel of distribution is one where the product
passes through an intermediary before reaching the final
consumer
Types of INDIRECT DISTRUBITION CHANNEL
One-channel intermediary
This is where there the product passes through only one
business or middleman before reaching the final consumer.
Two-channel intermediary
This exists where the product passes through two intermediaries before reaching the final consumer.
Types of DISTRIBUTION STRATEGIES
Intensive distribution
A firm using this strategy will distribute its product on a
very large scale by making it available in as many outlets
as possible.
Selective distribution
This is where the firm makes its product available in
selected outlets
Exclusive distribution
The firm’s product will be made available at only one outlet
in the geographical area
What is Logistics Strategy?
This is also known as ‘physical distribution’, which involves
all the activities associated with the movement of the product
from the producer to the consumer. This includes
Warehousing
This involves the receipt, storage and shipment of products.
Material handling
This part of the process involves the physical handling of the
product. It includes receiving, identifying, sorting, storing
and retrieving the good when it is time for shipment
Inventory control
It deals with
finding the most adequate level of stockholding that will
prevent the firm from holding excess stock
Order processing
Care must be taken here to ensure that the consumer
receives the product that was ordered and within the time
frame that they are expecting it.
Transportation
This is concerned with the mode(s) of transportation
that will be used to get the product to the consumer
What are some Promotion STRATEGIES?
Advertising
Advertising is any paid form of presentation and promotion
of ideas, goods or services by a sponsor.
Persuasive
This is used to influence consumers’ buying decisions. The
firm will attempt to convince the buyer that its product is
the one to purchase. The firm will highlight those attributes
about the product that makes it appealing to the consumer.
Sales promotion
This is usually a short-term form of promotion. It is where
people in the target market are given incentives by the firm
to encourage them to purchase its products (INCLUDES: Coupons, Free gifts, Sweepstakes)
Personal selling
This promotional tool is direct two-way communication
between the salesperson and potential buyer of the product.
What is ABOVE THE LINE AND BELOW THE LINE SALES PROMOTIONS?
Above-the-line promotion includes
the use of advertising
Below-the-line promotion includes
personal selling, sales promotion and
publicity
What are the 4 types of ADVERTISING
There are four types of advertising:
informative, persuasive, competitive
and collective
What is Digital MARKETING?
Digital marketing, also known as online marketing, is the use of the internet and other digital communication methods to promote brands and connect with potential customers.
This includes Social Media, Email, Search Engine Marketing,
Digital Markerting advantages and Disadvantages
Wide reach
Cheaper
Competitive Advantage
dis-
Competition
Ad blockers
Changes in Algorithim
