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Buisness > Section 3 > Flashcards

Section 3 Flashcards

1
Q

What is is the definition of marketing?

A

Marketing is identifying customer needs and satisfying them profitably

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2
Q

What is a marketing department structure like?

A

Marketing director - promotion ( advertising and promotion) - market research - sales (regional sales manager x 2 )- Distribution

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3
Q

What is the role of each one of these sections under the marketing director ( sales, marketing research, promotion, distribution)

A
  • Sales team - is responsible for the sales of the product, it usually has different section for each region the product is distributed to
  • the market research section - Responsible for identifying customer needs, changes in the market, and impact of competitor action. It will report them to the marketing director and this information will be used to help make decision about research and development, pricing levels, sales strategies and promotion strategies,
  • promotion- this team is responsible for arranging advertisements and organising them. The department can also choose the type of promotion that will be included in campaigns. It will have a marketing budget- a fixed amount of money to spend ( so it will have to decide which advertisement media is the most effective as it cannot spend what it likes)
  • distribution - transports the products to the market.
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4
Q

What is the definition of customer

A

A customer is a person, business or any other organisation which buys goods and services from a business.

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5
Q

What is the role of marketing

A
  • Identifying customer needs - what kind of products do customers want? What are price are they willing to pay? Where and how do they want to buy it? What after sales services do they want?
  • Satisfying customer needs- so that the goods and services can be sold profitably. Customers want the right product and the right place in the right time failing to do do or doing it less better than competitions can risk closure.
  • maintains customer loyalty- by building customer relationships. Keeping close contact with customers and finding out if the products or services are continuing to meet there needs will ensure the success of the business. If customers change their expectations of what they want then the business should take action to respond to this. This will be identified by maintaining customer relations ships. It is very important to keep existing customers rather than focusing on attracting new ones as it is much cheaper for business to try keeping existing customers.
  • build customer relationships to gain information about customers- this helps the business understand why the needs of customers are changing. It can be also used to understand how customers use the product and why they buy it. The makes for more effective marketing
  • anticipate changes in customer needs- by identifying new trends in customer demands or gaps in the market so the business can produce goods and services which are not currently available
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6
Q

What is the definition of customer loyalty?

A

Is when existing customers continually buy products from the same buisness

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7
Q

Customer relationships

A

Is communicating with customers to encourage them to become loyal to the business and its products

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8
Q

What happens if the business is successful in achieving all the roles of marketing?

A

It will enable the business to -
- raise customer awareness of the product
- increase revenue and profitability
- increase or maintain market share
- maintain or increase image of it product or image of the business
- target a new market segment or market
- enter new markets
- it can develop new products or improve existing products

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9
Q

What is the definition of market share

A

Market share is the percentage of total market sale held by one brand or business.

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10
Q

Why customer/consumer spending pattern change?

A

-Consumers taste and fashions change
-Changes in technology
- changes in incomes
- Ageing population

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11
Q

What is the definition of consumer?

A

A Consumer buys goods and services for personal use not to re-sell.

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12
Q

What is the power and importance of changes in customer needs

A

If businesses fail to satisfy customer needs then they will fail. The customer is “king” failing to respond to their changing needs will put a business in risk knowing them will ensure the success of the business

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13
Q

Why have some markets become more competitive?

A
  • Globalisation of markets has meant that products are increasingly sold all over the world
  • Transport improvements has meant that it is easier and cheaper to transport products from one part of the world to another -Internet/ e- commerce has meant that consumers can search for products and buy products from overseas markets. Even some services like insurance can be bought from aboard through internet. Increased customer information about products and business make a market more competitive.
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14
Q

How can business respond to changing spending patterns and increased competition

A
  • maintain good customer relationships
  • keep improving existing products
  • bring out new products to keep customer interest.
    -keep costs low to maintain competitiveness
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15
Q

What is meant by a market?

A

A market for a particular good or service is made up of the total number of customers and potential customers as well as the sellers, for the particular good or service

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16
Q

What is definition of mass market

A

Mass market is where there is a very large number of sales for a product,

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17
Q

What are the advantages of mass market

A
  • total sales in the market are very high
  • the business can benefit from economies of scale
  • risks can be spread as businesses often sell variation of products in the mass market and if one variation fails then the other products might still sell well.
  • opportunities for growth of the business due to large potential sales
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18
Q

What are there disadvantages of mass market

A

-High level of competition with business selling similar products
- high cost for advertising and promotion. \
- standardised products or services are produced and so may not meet the specific needs of all customers or potential customers, therefore leading to lost sales

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19
Q

What is the definition of niche market

A

A niche market is a small usually specialised segment of a much larger market

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20
Q

What are the advantages of a niche market

A
  • small markets can sell successfully in niche market as larger business would have not identified them and focused more on mass markets =. This will reduces completion from the larger business in niche markets.
  • the needs of consumers can be more closely focused on, and therefore tarted by the business. This can help increase customer loyalty and customer relationships
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21
Q

What is the market segment

A

Market segment is an identifiable sub group of a while market in which consumers share similar characteristics or preferences .

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22
Q

What is the role of market research

A

The role of market research is to find out answers to these questions -
- would customer be willing to buy my product
-what price would they be prepared to pay
- where would they most likely buy my product
- what features of my product do customers like or dislike
- what type of customer would buy buy my product
- what type of promotion would be effective with these types of customers
- how strong is competition and who are the main competent business

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23
Q

What is the definition of market research

A

Market research is the process of gathering, analysing and interpreting information about a market

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24
Q

Product T oriented business

A

A product oriented business is one whose main focus of activity is on the product itself ( usually a product oriented business produces the product first and then looks for a market, productive oriented businesses are not very common today and they usually just sell necessary goods like agriculture tools and fruits and generally have no brand name)

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25
Q

What is a market orientated business

A

A market orientated business is one which carries out market research to find out consumer wants before a product is developed and produced.

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26
Q

What is a marketing budget? - usually required by market orientated businesses to carry out market research

A

A marketing budget is a financial plan for the marketing of a product or product range for some specified period of time. It specifies how much money is available to market the product or range, so that the marketing department knows how much money it may spend

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27
Q

What can market research find out

A

Quantitative information- about quantity
Qualitative information - which requires an option on

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28
Q

What are the two main types of market research

A

Primary research - field research
Secondary research - desk research

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29
Q

What is primary research

A

Primary research is the collection and collation of original data via direct contact with potential or existing customer( also called field research)

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30
Q

What are the advantages of primary research

A
  • advantages of primary research
  • it is up to date and relevant for the business under taking it
  • it is first hand
  • is is not available to other businesses ( unless they undertake their own research)
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31
Q

What are the disadvantages of primary research

A
  • it can be expensive - for example individually interviewing many people
  • it is not available immediately - it takes time to collect
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32
Q

What are the types of primary research

A

Questionnaires
Online surveys
Interviews
Focus groups

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33
Q

What is the definition of an questionnaire

A

A questionnaire is a set of questions to be answered as a means of collecting data for market research

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34
Q

What is the definition of online survey?

A

Online surveys require the target sample to answer a series of questions over the internet

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35
Q

What is the definition of interviews

A

Interviews Involve asking individuals a series of questions, often face to face or over the phone

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36
Q

What is the definition of a focus group

A

A focus group is a group of people who are representative of the target market

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37
Q

What are the advantages of a questionnaires

A
  • detailed qualitative information can be gathered about the product or service
  • customers opinion about the product or service can be obtained
  • they can be carried out online
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38
Q

What are the disadvantages of questionnaires

A
  • if questions are not well thought the answers wont be accurate
  • carrying out questionnaires can take a lot of time and money
  • collating and analysing the results is also very time consuming
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39
Q

What are the advantages of online surveys

A

-fast, with quicker response than other types of survey
- cheaper than interviews or postal questionnaires
- easy to complete for the participate
- data collected can be quickly presented and analysed using IT tools

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40
Q

Disadvantages of online surveys

A
  • absence of an interviewer to ask more questions or to explain any question
  • cannot reach potential respondents who do not have access to the internet
  • scope for fraud - some people will just answer the questions for the sake of answering them
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41
Q

What are the advantages of interviews

A
  • interviewer is able to explain any questions that interviewee does not understand
  • detailed information can be fathered of what the interviewee like and dislike about the product
42
Q

What are the disadvantages of interviews

A
  • whether consciously or unconsciously the interviewer could lead the interviewee to answer in a certain way because of interviewer bias
  • interviews are very time consuming to carry out and therefore can be expensive as well
43
Q

What are the advantages of focus groups

A
  • they provide detailed information about consumers taste and preferences
  • interactions between members of the group can help the business understand
    -quicker and cheaper than individual interviews.
44
Q

What are the disadvantages of focus groups

A
  • They can be time-consuming and expensive if carried out by an specialist market research agency
  • discussions may be biased if some people are influenced by other peoples opinion
  • can be dominated by just a few people so the researcher will have to be skilled to deal with this.
45
Q

Why do we need a sample

A

IT is very time consuming and expensive to try to include all the relevant population so we need a sample

46
Q

What is the definition of a sample

A

A sample is the group of people who are selected to respond to a market research exercise ,such as a questionnaire.

47
Q

What is is the definition of a random sample

A

A random sample is when people e are selected at random as a source of information for market research.

48
Q

What is the definition of quota sample

A

A quota sample is when people are selected on the basis of certain characteristic ( such as age, gender or income ) As a source of information for market research.

49
Q

What is the definition of secondary research?

A

Secondary research uses information that has already been collected and is available to use by others. ( Also called desk research)

50
Q

Advantages of secondary research

A
  • cheaper way of gathering information compared to primary research
  • it can be used to find quantitative information about the market for example secondary research could be used to find the size of the total market.
  • secondary research - such as using newspapers - can help find out vital economic forecasts
  • it is usually quicker to undertake secondary research than primary research.
51
Q

What are the disadvantage of secondary research

A
  • data may be collected several ears ago and may be out of date
  • data is available to all business
  • data may not be completely relevant as it was not collected with the needs of the business in mind
52
Q

What are the internal sources of secondary data?

A
  • sales records, pricing data, customer records, sales reports
  • opinions of distributions and public relations personal
  • finance department
  • customer service department
53
Q

What are the external sources of secondary data

A

Government statistics
Newspaper
Trade association
Market research agencies
Online sources

54
Q

What are the different ways in which you can present data from market research

A
  • tally table or tally chart
  • chart
  • graph
55
Q

What is the definition of marketing mix

A

The marketing mix is a term which is used describe all the activities which go into marketing a product or service. These activities are often summarised as the four Ps - product, price, place and promotion

56
Q

What are the four P’s OF THE MARKETING MIX

A

Price - high/low?, competitors price?
Promotion- how will potential customers know about it
Place- how - and -where will the product be sold to customers
Product - main features, design? Packaging?

57
Q

What are the four main types of goods or services

A
  • consumer goods
    -consumer services
  • producer goods
  • producer services
58
Q

What are the benefits of developing a new product

A
  • unique selling point (USP) will mean that the business is first to the market with a new product
  • diversification for the business, giving it a broader range of products to sell
  • it allows the business to expand into new markets
  • it may allow business to expand into existing markets.
59
Q

What is USP

A

The USP ( unique selling point ) is the special feature of a product that differentiates it from the products of competitors

60
Q

Costs of developing new products

A
  • the cost of carrying out market research and Analysing the data
  • the cost of producing trial products, including the cost of wasted materials
  • the lack of sales if the target market is wrong
  • the loss of company image if the product fails to meet customer needs.
61
Q

What is a brand name?

A

The brand name is the unique name of the product that distinguishes it from other brands

62
Q

What is brand loyalty

A

Brand loyalty is when consumers keep buying the same brand again again instead of choosing a competitiors brand

63
Q

What is the definition of brand image

A

Brand image is an image or identity given to an product that gives it a personality of its own and differentiates it from competitors brand

64
Q

What is the definition of packaging

A

Packaging is the physical container or wrapping for a product. It is also used for promotion and selling appeal.

65
Q

What is the role of packaging

A
  • protects the product
  • suitable for the product to fit in
  • easy to transport the product
  • eye-catching
  • carries information about the product
  • easy to open the container and use the product
  • promotes the brand image
66
Q

What are the stages of the product life cycle

A

1- development
2- introduction
3 - growth
4- maturation
5- saturation
6- decline

67
Q

What is the definition of product life cycle

A

The product life cycle describes the stages a product will pass through from its introduction, through its growth until it is mature, and then finally its decline

68
Q

Pricing desisions for all stages in a product life cycle

A

Introduction - high price ( low price could give the impression that it is low quality )
Growth - higher than competitors because they are still relatively “ new”
Saturation or maturity stage - price reduced
Decline - some substantial discounts are offered especially if it does not plan to extend its life

69
Q

How does the product life cycle influence promotion decisions

A

Introduction - spending on promotion will be higher in the introduction stage as the product will be new and customers need to be informed about it
Advertising will probably be reduced in later stages either because the product is already well known or because the want to save the marketing budget for a newer product
Spending on promotion can be increased again if the business is going to use an extension strategy

70
Q

What is the definition of an extension strategy

A

Extension strategy is a way of keeping a product at the maturity stage of the life cycle and extending the life cycle

71
Q

What are some possible ways that a business can expand its product life cycle

A
  • introduce new variations of the original product
  • sell into new markets
  • make small changes to the products design, colour or packaging
  • use a new advertising campaign
  • introduce a new improved version of the old product
    -sell through additional different retail outlets
72
Q

what is the definition of cost-plus pricing

A

cost of manufacturing the product plus a profit markup

73
Q

what does cost plus pricing involve

A

-estimating how many units of the product will be produced
-calculating the total cost of producing this output
-adding a percentage markup for this profit

74
Q

what are the benefits of cost-plus pricing

A
  • the method is easy to apply
  • different profit mark-ups could be used in different markets
  • each product earns a profit for the business
75
Q

what are the limitations of cost-plus pricing

A

-business could lose sales if the selling price is higher than competitors price
-a total profit will only be made if sufficient units of the product are sold
-there is no incentive to reduce cost

76
Q

how to calculate cost plus price - selling price

A

total cost/ total output + percentage markup on profit

77
Q

what is the definition of competitive pricing

A

competitive pricing is when products are priced in line or just below competitor’s prices to try to capture more of the market

78
Q

What are the benefits of competitive pricing

A
  • sales are high as the product is priced at a realistic level - the product is not overpriced or underpriced
  • avoid price competition - which can cause all businesses in the industry to lose profits
  • used when it is difficult for customers to differentiate between the products of different businesses
79
Q

What are the limitations of competitive pricing

A
  • if the cost of production of the business are higher than those of the competitors- perhaps because of higher quality - then a competitive price could lead to a lose
    -a higher quality product may need to be sold at a higher price than its competitors to give a higher quality image
  • in order to figure out the price of competitors products detailed research should be done this costs time and money.
80
Q

What is the definition of penetration pricing

A

Penetration pricing is when the price is set lower than the competitors’ prices in order to be able to enter a new market

81
Q

What are the benefits of penetration pricing

A
  • often used with newly launched products to create an impact on customers
  • it iensures that sales are made and the new product enters the market suscefully
  • market share will build up quickly
82
Q

What are the limitations for penetration pricing

A
  • the product is sold at a low price therefore the profit per unit might be low
  • customers might be used to low prices so if the business rises its prices after its early success it will be rejected
  • might not be appropriate for a branded product with a reputation for quality
83
Q

What is the definition of price skimming

A

-price skimming is where a high price is set for a new product on the market

84
Q

What are the benefits of price skimming

A
  • skimming can help to establish the product as good quality
  • high resarch and development costs can be rapidly recouped from the profit made on the product at higher price
  • if the product is unique, a high price will lead to profits being made before competitors launch of similar products
85
Q

What are the limitations of price skimming

A
  • high price might discourage or entail customers from buying the product
    -the high price and high profitability might encourage more competitors to enter the market
86
Q

What is promotional pricing?

A

Promotional pricing is when a product is sold at a very low price for a short period of time

87
Q

What are the benefits of promotional pricing

A
  • it is useful for getting rid of unwanted inventory that will not sell
  • it will help renew interest in a productct is sales are falling, for example during economic recession
88
Q

What are the limitations of promotional pricing

A
  • revenue will be lower as price is reduced
  • it might lead to a price competition between businesses
89
Q

What is dynamic pricing

A

Dynamic pricing is when businesses change product prices, usually when selling online, depending on the level of demand

90
Q

What is price elastic demand

A

Price elastic demand is where consumers are very sensitive to changes in price

91
Q

What is price inelesatic demand?

A

Price inelastic demand is where consumers are not sensitive to changes in price

92
Q

What is a distribution channel

A

A distribution channel is the means by which a product is passed from the place of production to the customer

93
Q

What are all the distribution channels

A
  • producer - consumer - distribution channel 1
  • producer - retailer - consumer - distribution channel 2
  • producer - wholesaler- retailer- consumer - distribution channel 3
  • producer - agent - wholesaler- retailer- consumer - distribution channel 4
94
Q

What are the advantages of distribution channel 1 - direct to consumers?

A

This distribution channel is very simple it involves the manufacturer directly selling to consumers
-suitable for products, such as certain food products =, which are sometimes sold straight from the farm
-there is a lower price if sold directly to consumers -cut out wholesaler/ retailer
-products can be sold by mail order catalog or via internet

95
Q

What are the disadvantages of distribution channel 1

A
  • it is usually impractical for most products as consumers don’t leave near the factories and cannot come to the factory to buy products
  • this method’s is not practical for products that cannot be easily sent by post
  • it can be very expensive to send products by post or mail/ courier and therefore it may not be cost effective
96
Q

What are the advantages of distribution channel 2 - ( producer - retailer - consumer )

A
  • producers sell large quantities to retailers
    -reduced distribution cost compared to selling directly to consumers c
97
Q

What are the disadvantages of distribution channel 2

A
  • no direct contact with customers
  • the price is high ( as retailer has to cover their cost)
98
Q

What is breaking bulk

A
  • wholesaler performs function of breaking bulk
  • breaking bulk is where wholesaler’s buy from manufacturers in large quantities and then divide the inventory into much smaller quantities for retailers to buy.
99
Q

What are the advantages of distribution channel 3 - product - wholesaler- retailer - customer

A
  • wholesaler saves storage space for small retailers and reduce storage costs
  • wholesaler may give credit to retailer customers so they can take the goods straightaway and pay at a later date
  • wholesaler may deliver to small retailers thus saving on transport cost
    -wholesaler can give advice on whiting in selling well
100
Q

What are the disadvantages of distribution channel 3 - producer - wholesaler - retailer

A
  • may be more expensive for small shops to buy from wholesaler compared to directly buying from retailer
  • wholesaler may not have the full range of products to sell
  • takes longer for fresh products to reach shops so it may not be of good quality.
  • wholesaler may be a long way from small shops
  • the consumer price is higher than “direct selling price” as both wholesaler’s and retailers have to make profit
101
Q

What is the definition of an agent?

A

An agent is an independent person or business that is appointed to sell and distribute a product or product range

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