Section 2 - Marketing Flashcards
What are the 4 parts of the marketing mix?
- Product
- Place
- Promotion
- Price
What is market research?
A collection of information to help businesses decide on particular products
Why do businesses conduct market research?
- See what target market want
- Know how to appeal to target market
- Improve products
- Understand demand
- Understand customers
- Keep ahead of competitors
- See what your product is worth
What is primary market research?
Getting the information yourself
What are some examples of primary research?
- Questionnaire
- Telephone
- Online (surveys)
- Samples
- Postal surveys
What are the advantages of using questionnaires as primary research?
- Easily analysed
- Wide range of responses
- Get answers to the questions you want, personalised by business
What are the disadvantages of using questionnaires to conduct market research?
- Closed questions
- Inaccuracies
- Rejection
- Need lots of results
What are the advantages of phoning to conduct market research?
- Brand recognition
- Can adapt questions for appropriateness
- Can get detailed feedback
- Opinions
What are the disadvantages of phoning to conduct market research?
- Often unwanted
- People dislike this method
- Can get a bad reputation
- Hang up
What are the advantages of online surveys to conduct market research?
- Reach a wide audience
- Easy, no work after set up
- Instant
What are the disadvantages of online surveys to conduct market research?
- Not everyone has access to the internet
- Inaccuracies
- Often ignored
What are the advantages of samples to conduct market research?
- Get customers first impressions
- Awareness
- Test actual product
What are the disadvantages of samples to conduct market research?
- Biased, may feel pressured to be positive
- Costly
What are the advantages of using postal surveys to conduct market research?
-Cheap
What are the disadvantages of postal surveys to conduct market research?
- Often discarded
- Not appropriate for all products
What is secondary research?
Information already exists, just finding it
What are the advantages of doing secondary research?
- Easy
- Cheap
- Fast
What are the disadvantages of doing secondary research?
- Not specific to your business, may not answer your questions
- Not as reliable
- May be out of date
What are the factors that affect the price of a product?
- Competitor’s price
- Costs for business
- Target market
- Number of customers
- How much profit you want to make
- Brand reputation
- Quality
- Production method
- Need or want
- Location
- Trends
- Demand
- Life span of product
What is competitor based pricing?
Consider how much competitors charge for similar product, often price similarly
What is premium pricing?
Setting higher price than competitors so customers perceive it to be better quality
What is penetration pricing?
- Setting price low to boost sales
- Used for new products or to grow firms
- Low prices at start to attract customers then increase price
What is skimming pricing (creaming)?
Setting price high then decreasing price, e.g. when established business releases high quality product
What is loss leader?
When prices are set below unit cost at a loss to attract customers
What is destroyer pricing?
Pricing low so business loses money to eliminate competitors
What is percentage mark up pricing?
Adding a percentage to the unit cost as a way to decide on profit per product
What is cost plus pricing?
Calculate cost to make product, then decide on price based on manufacturing costs
What is psychological pricing?
Making people think they are getting a better deal than they actually are
What is product range?
When a business sells a lot of products to a large target market
What is product mix?
When a business sells closely related products that can be marketed together to same target market
What are the 3 channels of distribution?
- Modern
- Traditional
- Direct
What is the modern channel of distribution?
Producer–>retailer–>customer
What is the traditional channel of distribution?
Producer–>wholesaler–>retailer–>customer
What is the direct channel of distribution?
Producer–>customer
What are the benefits of selling a branded product?
- Better quality
- Reputation
- Established
What are the drawbacks of selling a branded product?
- More expensive
- Competition
- Advertisement
What are the benefits of selling an own brand product?
- Cheaper to buy
- Cheaper to make
- Larger target market
- Growing market
What are the drawback of selling an own brand product?
- Lower quality
- No loyalty
- Low profit margin
What are the 2 methods of promotion?
- Above the line: use of media to promote (generally more expensive)
- Below the line: no use of media to promote
What are some examples of above the line promotion?
- Newspaper
- TV
- Magazines
- Radio
- Internet
- Billboards
- Posters
- Sponsorship
What are some examples of below the line promotion?
- Flyers
- Sales offers e.g. 2 for 1
- Loyalty cards
What are the advantages of using the modern channel of distribution?
-High profit margins, sell more expensive
What are the disadvantages of using the modern channel of distribution?
-Can make more profit through traditional
What are the advantages of using the traditional channel of distribution?
- Easy to sell product, only to wholesaler, sell in large quantities
- Gives customer choice
What are the disadvantages of using the traditional channel of distribution?
-Lower profit margins, sell for cheaper
What are the advantages of using the direct channel of distribution?
- Very high profit margins
- Faster
- Cheaper
- Relationship w/ customers
What are the disadvantages of using the direct channel of distribution?
-Lots of work, make product + find customers
