schedule D Flashcards
market size definition
total sales volume of the market
market share definition
the proportion of total market sales that a firm has
market growth definition
the percentage increase in the size of the market by value or volume over a period of time
internal influence on marketing objectives (CO)
Corporate Objectives
- a marketing objective should not conflict with a corporate objective
internal influence on marketing objectives (F)
Finance
- the financial position of the business affects scope and scale of marketing objectives
internal influence on marketing objectives (HR)
Human resources
- for services businesses in particular having a motivated, high quality workforce is a key factor in affecting marketing objectives
internal influence on marketing objectives (OI)
Operational issues
- operations plays a key role ensuring the business can either compete on cost or quality which will influence the target market of the product
internal influence on marketing objectives (OC)
organisational culture
- e.g. a marketing orientated culture is constantly looking for ways to meet customer needs.
external influence on marketing objectives (EE)
Economic environment
- key factor is determining demand e.g. rate of economic growth will impact demand
external influence on marketing objectives (CA)
competitors actions
- marketing objectives have to take account of likely competitor responses
external influence on marketing objectives (MS)
Market size
- a market who’s growth slows is less likely to support an objective of significant revenue growth or new product development.
external influence on marketing objectives (TC)
Technological change
- many markets are affected by rapid technological change, shortening product life cycle and creating great opportunities for innovation
external influence on marketing objectives (S&PC)
social & political change
- changes to legislation may create or prevent marketing opportunities
primary market research description
data collected first hand for a specific purpose
e.g. focus groups
advantages of primary market research (3 points)
- directly focused to research objectives = fit for purpose
- tends to be up to date
- more detailed insights
disadvantages of primary market research (2 points)
- time consuming and often costly
- risk of survey bias - research samples may not be representative of population
secondary market research description
data that already exists and which has been collected for a different purpose
e.g. big data
advantages of secondary market research (3 points)
- often free and easy to obtain
- good source of market insights
- quick to access and use
disadvantages of secondary market research (3 points)
- can quickly become out of date
- not always tailored to specific research needs
- specialist reports often quite expensive
quantitive data definition
the gathering of statistical data to inform the company about peoples behaviour but doesn’t identify the reasons
qualitative data definition
the gathering of non statistical information that gives a company in depth insight into the reasons for human behaviour
reasons for carrying out market research (6 points)
- identify potential customers
- understanding your existing customers
- set realistic targets
- develop effective strategies
- examine and solve business problems
- identify business opportunities
risks for business of not carrying out market research (3 points)
- might miss changing taste
- inaccurate or inappropriate targets
- cannot solve problems due to ineffective data
random sampling description
a sample is selected from an individual chosen by chance
quota sampling
a population is segmented into groups. judgement is made selecting respondents that are representative of that subgroup.
satisfied sampling
population separated into sub groups. respondents are randomly selected from those subgroups.
advantages of sampling (3 points)
- data gathered allows us to make more informed decisions
- sampling can give a competitive advantage
- sampling allows us to access a broad range of data
disadvantages of sampling (2 points)
- if sample size isn’t sufficient then data will be inaccurate
- sample has to be asking correct demographic to be relevant.
extrapolation definition
a statistical technique that predicts future trends based on existing data
extrapolation method
last year - first year = X
X/years = Y
Y + last year = answer
confidence levels definition
the probability that the research findings are correct (expresses as a %)
how are confidence intervals used in quality management (2 points)
- percentage reliability machines
- chance that quality control samples will detect issues
how are confidence intervals used in market research (2 points)
- statistical estimates for sales forecasting
- reliability of data from customer surveys
three steps of segmentation (3 points)
- segmentation - potential customers are split into different groups
- target - you chose which groups you are going to sell to
- position yourself - apply your marketing mix
demographic segmentation (4 points)
- age
- gender
- race
- religion
geographic segmentation
based on where people live
income segmentation
based on their income
behavioural segmentation
based on behavioural patterns rather than characteristics
e.g. frequency of purchase, reason for purchase
benefits of segmentation (3 points)
- increased brand loyalty
- increased demand
- creates personal relationship with customer
drawbacks of segmentation (2 points)
- its expensive (marketing, R&D, raw materials)
- targeting small markets can lead to less profitable goods
advantages of mass marketing (4 points)
- target a wider market meaning more sales
- benefit from economies of scales
- no need to carry out segmentation (cheaper)
- raises more brand awareness
disadvantages of mass marketing (5 points)
- not meeting the customers needs
- less added value with products
- large market = more competition
- increased pressure to decrease prices
- initially expensive to purchase machinery
advantages of niche marketing (3 points)
- meets customers needs well
- can survive in large market by targeting a small segment
- added value and increased brand loyalty mean they can charge premiums
disadvantages of niche marketing (3 points)
- tough to grow
- typically fashion trends meaning they are high risk
- dont benefit from the economies of scale
factors affecting positioning (4 points)
- price
- products
- market mapping
- image
PED definition
the correlation between price and the quantity demanded
PED of a price elastic product
(less than) -1>
PED of a price inelastic product
between 0 and -0.9
the 7p’s of the marketing mix
- Product
- price
- place
- promotion
- people
- process
- physical environment
consumer product: convenience item (2 points)
- products where the ease with which a consumer can get the product is a key priority
- business can charge premium for the convenience
consumer product: shopping goods (2 points)
- products where the consumer compares products before making a decision
- brought less frequently
consumer products: speciality (2 points)
- products that a customer will spend time thinking about and often research before buying
- infrequent
industrial products: materials and parts (3 points)
- raw material components
- mostly sold to other industrial users
- price and service are key issues
industrial products: capital items
- used in production or operations
e.g. IT systems
product lifecycle: development (3 points)
- investment in R&D
- product testing
- negative cash flow
product lifecycle: introduction (3 points)
- when product is launched
- sales may start slow
- may require investment into marketing
product lifecycle: growth (3 points)
- sales begin to increase
- product awareness is increasing
- positive cash flow
product lifecycle: maturing (3 points)
- rate of growth is slowing
- sales can still be high
- could be due to increase in competition
product lifecycle: decline (2 points)
- sales are falling
- perhaps better substitutes
extension strategy
this is when a product is adapted and given a new lease of life used to increase sales in a market that has become saturated
drawback of extension strategy
opportunity cost - do you spend the money on the extension or on developing a new product
Boston Matrix: Dog (3 points)
low market share
low market growth
cut off product
Boston Matrix: cash cow (3 points)
high market share
low market growth
milk as much money as possible
Boston Matrix: star (3 points)
high market share
high market growth
turn into a cash cow
Boston Matrix: question mark (3 points)
relatively high market share
low/declining growth
turn (back) into a star
YED of a normal good
0-1
YED of a luxury good
> 1
YED of an inferior good
0>
