Practice Sac Flashcards
Define the term ‘marketing and explain why establishing a marketing presence will support the achievement of the objectives of a business. In your response refer to one business objective (4 marks)
Marketing is the process of looking at a range of factors including the products pricing, promotion and distribution and how these can be used to better promote a product to potential customers and lead to a sale from them. Marketing is important as a business will need to make sales to meet its objective of making a profit as it will need the revenue from sales to deduct its operating costs from and then make a profit.
Give an example of how a business’s marketing strategy can be affected by the external operating environment and the external macro environment. (6 marks)
The external operating environment includes factors that are outside the business but have a direct linkage to it. Competitors are from this environment. As also Customers, and Suppliers.
Competitors might encourage a business to offer similar items to them that would have to be marketed to increase sales.
The external macro environment includes factors that are outside of the business with no direct linkage but can have an impact on its operations. An example of a factor from this environment could be economic factors like consumer buying decisions based on interest rates.
Analyse two market research practices that a business could use and justify which would be most suitable. (6 marks)
A market research practice is an action that a business could undertake to gain more information to determine what goods and services people want from it, where the potential customers are located and what are their price and quality expectations may be.
The business could conduct a survey, which means gathering data by interviewing people. The main benefit of a survey is that it gathers firsthand information that provides details of customers’ opinions. A negative is that gathering information through surveys is becoming more difficult because respondent rates are declining.
Another disadvantage is that since not all people may be prepared to take the survey, the results may be biased.
The business could also use Observation involves recording the behaviour of customers. A benefit is that no interviews are involved and direct contact with respondents is avoided. Instead, the actions of the customers are observed. A negative is that such methods can raise serious ethical issues, especially regarding privacy.
I believe that the survey method would be more suitable as in today’s society people really value their privacy and they would have a negative reaction to being recorded without their consent.
Distinguish between the socio-cultural and psychological factors that influence customer choice. (4 marks)
Socio-cultural influences refer to the impact of forces around an individual on their choices, such as a peer group, which is a group of people with whom a person closely identifies, adopting their attitudes, values, and beliefs whereas psychological factors refer to the influences from within an individual impacting on their choices, such as the customer’s attitude as a person’s having an overall feeling about an object or activity.
How might price, place, people and physical evidence influence the marketing mix to be used by a business in marketing the goods and services offered? (7 Marks)
The marketing mix is important for business as it is crucial to attract new customers to increase sales.
Price will be important as a business will need to match or provide better prices than competitors to attract new customers.
The place of the business should be where they will have a customer base and passing customer traffic so that the business can increase its exposure to potential customers like a local shopping area that has a high customer traffic amount.
For the people, it would be expected that the staff in the offices are good at dealing with customers and at providing the services that the public want.
The Physical appearance of the buildings and the interior should seem professional.
The question for the report is to outline the four different stages of a life cycle as they would relate to a business and explain two ways in which a product can be revived as it enters the extension stage. (8marks).
The product life cycle refers to the different stages that a product will go through its life span when available to be purchased customers.
The first of 4 stages of the life cycle of a product is the introductory stage. This is the stage when the product is introduced to the market. It is important that the product gains a good reputation and is targeted at the correct groups.
The second stage is the Growth Stage during which the aim of the business is to increase the sales of the product. To achieve this a business must promote to the product to the right potential customers at the right price.
The third stage is the Maturity Stage which is when the product is fully accepted into the market and the sales for the item will peak. It is now important for the business to look at ways to maintain customer interest.
The last stage is the Decline Stage, this is when the product no longer appeals to the customer. This lack of interest could lead to it being replaced with a newer and better product. The business will cease to produce the product and will look at ways to move (sell) any left over inventory.
7a. Discuss the costs and benefits of a business establishing positive public relations. (4marks)
Public relations refer to how a business interacts with its customers. If the public relations are favourable it means that customers view the business from a positive perspective.
The positives of this position are that repeat sales are very likely to result in loyal customers, who are very likely to recommend the business to friends and family, resulting in more sales, leading to increased revenue.
Also, loyal customers who trust in the
business’s brand are likely to spend more at the business.
Another positive is that expenses can be reduced as it is more cost-effective to retain existing customers than it is to attract new customers.
The cost of maintaining a favourable image for a business is that it can take time and can cost money which can impact the ability to complete other tasks, like training new staff, and this extra cost can reduce profit for the owner.
b. Explain the term ‘crisis communication plan’. Propose and explain two public relations strategies that would
be best for responding to the crisis at a business. (6marks)
A crisis communication plan is a process that the business will put into place so that it has a process to address the issue and gain public confidence back again. A crisis communication plan has many different stages. Firstly the business should determine the appropriate Target Group. The next stage is to Communicate the essential information to these affected groups. The third stage is to get all the Facts about how the issue appeared and why. The fourth stage is to give Responses on the issue to the affected groups to reduce the chance of misinformation. The fifth stage is to answer any questions that the public might have. The sixth stage is to provide updates on the issue to the public. The seventh and eighth stage refers to creating a team of employees and professionals to deal with customers. The ninth and tenth stages refer to Monitoring and Evaluating the Crisis communication plan and making adjustments if required.
Public Relation Strategies involve:
- Providing Quality Customer Service / perhaps an online presence for this.
- Providing customer’s with the ability to return products.
- Provision of refunds to customers if required.
- Seeking Customer Feedback
