Section 3 Marketing Flashcards

Question

What are the advantages of a questionnaire?

Answer 1

- Detailed qualitative information can be gathered about the product or service - Customers' opinions about the product or service can be obtained. - They can be carried out online - To encourage people to fill in the questionnaire, vouchers can be offered or participants entered into a prize draw

Answer 2

- If questions are not well thought out, the answers to them will not be very accurate - Carrying out questionnaires can take a lot of time and money - Collating and analysing the results is also time-consuming.

Answer 3

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

Answer 4

- Fast, with quicker response times than other forms of survey - Cheaper than interviews or postal questionnaires - Easy to complete for the participant - Data collected can be quickly presented and analysed using IT tools.

Answer 5

- Absence of interviewer to explain open-ended questions or to ask follow-up questions to gain more detailed information - Cannot reach potential respondents who do not have access to the internet - Scope for fraud - some people will just answer an online survey to gain any incentives being offered and not give honest answers

Answer 6

Focus groups are where groups of people agree to provide information through a group discussion with a researcher present.

Answer 7

- They provide detailed information about consumers' tastes and preferences. - Interaction between members of the group can help the business understand the reasons for people's opinions. - Quicker and cheaper than individual interviews.

Answer 8

- They can be time-consuming and expensive if conducted by a specialist market research agency. - Discussion could be biased if some people on the panel are influenced by the opinions of others. - Can be dominated by just a few people so the researcher will need to be experienced to deal with this.

Answer 9

Interviews involve asking individuals a series of questions over the internet.

Answer 10

- The interviewer is able to explain any questions that the interviewee does not understand. - Detailed information can be gathered about what the interviewees like and dislike about the product.

Answer 11

Businesses produce the product first and then try to find a market for it. This is riskier and less common today.

Answer 12

- The interviewer could lead the interviewee into answering in a certain way, resulting in inaccurate results due to interviewer bias - Interviews are very time-consuming to carry out and therefore they are often an expensive way of gathering information.

Answer 13

Businesses carry out market research to find out what customer wants before a product is developed and produced - requires businesses to have a marketing budget

Answer 14

A marketing budget is a financial plan for the marketing of a product or product range for some specified period of time.

Answer 15

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

Answer 16

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

Answer 17

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

Answer 18

When deciding whom to ask to fill in a questionnaire or survey or whom to interview, a sample has to be selected. This is because it would be too expensive and time-consuming to try to include all the relevant populations in the research.

Answer 19

- Cheaper way of gathering information than primary research as data collection has already been done by others. - It can be used to help assess the total size of a market by finding out the size of the population and its age structure. - Newspapers may carry vital economic forecasts if you are trying to assess when a recession is coming to an end and your sales are likely to increase again. - It is usually quicker to obtain secondary data than to undertake primary research.

Answer 20

- Data may be outdated as it may have been collected several years ago - Data is available to all businesses including your competitors - Data may not be completely relevant as it was not collected with the needs of one business in mind

Answer 21

- Sales department records, pricing data, customer records, sales reports - Opinions of distribution and public relations personnel - Finance department - Customer service department

Answer 22

- Government statistics - Newspapers - Trade association - Market research agencies - Online sources

Answer 23

Government statistics are a detailed source of general information about such things as the population and its age structure.

Answer 24

Newspapers may have useful articles, for example, information about the general state of the economy and whether customers are expected to increase or decrease their spending in the near future.

Answer 25

If there is a trade association for the industry, it often provides information for the businesses in that industry.

Answer 26

- How carefully the sample was drawn up - The way in which the questions in the questionnaire were phrased to ensure honest responses - The sample selected - The size of the sample - The wording of the questions - Who carried out the research - Bias - Age of the information

Answer 27

- A table or tally chart - usually used to record the data in its original form - A chart - shows the total figures for each piece of data or the proportion of each piece of data in terms of the total number - A graph - used to show the relationship between the two sets of data.

Answer 28

The marketing mix is a term which is used to describe all the activities which go into marketing a product or service.

Answer 29

- Product - Price - Promotion - Place

Answer 30

The product itself is the most important element in the marketing mix. Without a product that meets customer needs, the rest of the marketing mix is unlikely to be able to achieve marketing success.

Answer 31

- Consumer goods - Consumer services - Producer goods - Producer services

Answer 32

These are goods which are bought by consumers for their own use.

Answer 33

These are services that are bought by consumers for their own use.

Answer 34

These are goods that are produced for other businesses to use.

Answer 35

These are services that are produced to help other businesses.

Answer 36

- The product needs to satisfy consumer wants and needs. If it does not then it will not sell. - The product also needs to be of the right quality so consumers are willing to pay the price for it. - The product must not be so difficult to make that the costs of production are greater than the price charged for it. - Design of the product is very important as the quality needs to be appropriate for the brand image.

Answer 37

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

Answer 38

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

Answer 39

Brand loyalty is when consumers keep buying the same brand again and again instead of choosing a competitor's brand.

Answer 40

Brand image is an image or product which gives it a personality of its own and distinguishes it from its competitors' brands.

Answer 41

- Developing a strong brand involves creating a unique and identifiable name, design, symbol or other feature that differentiates a product/service or company from its competitors - Brand image can help a business to add value as customers are often willing to pay higher prices for brands they recognise and trust

Answer 42

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

Answer 43

- Promotes the brand image - Protects the product - Make the product easy to use - Labelling - legal and ethical elements - Make the product easy to transport/stand in shops

Answer 44

- Development - Introduction - Growth - Maturity - Saturation - Decline

Answer 45

- The prototype is tested and market research is carried out before the product is launched onto the market. - There are no sales at this time.

Answer 46

- Sales for a product grow slowly at first because most consumers are not aware of its existence. - Informative advertising is used until the product becomes known - Price skimming may be used if the product is a new development and there are no competitors - No profits are made at this point as development costs have not yet been covered.

Answer 47

- Sales start to grow rapidly. - The advertising is changed to persuasive advertising to encourage brand loyalty. - Prices are reduced a little as new competitors enter the market and try to take some customers - Profits start to be made as the development costs are covered.

Answer 48

- Sales now increase only slowly - Comptetition becomes intense - Pricing strategies are now more competitive or promotional pricing - A lot of advertising is used to maintain sales growth - Profits are at their highest

Answer 49

- Sales reach saturation point and stabilise at their highest point - Competition is high but there are no new competitors - Competitive pricing is used - A high and stable level of advertising is used - Profits start to fall as sales are static and prices have to be reduced to be competitive

Answer 50

- Sales of the product decline as new products come along or because the product has lost its appeal - The product is usually withdrawn from the market when sales become so low and prices have been reduced so far that it becomes unprofitable to produce the product - Advertising is reduced then stopped

Answer 51

The product life cycle describes the stages a product will pass through.

Answer 52

An extension strategy is a way of keeping a product at the maturity stage of the life cycle and extending the cycle.

Answer 53

- Introduce new variations e.g. child version - Sell into new markets e.g. other countries - Make small changes to the product e.g. colour - Use a new advertising campaign - Introduce new improved versions of the old product e.g. iPhone 4, 5, 6, etc. - Sell through different channels e.g. internet

Answer 54

- Cost-plus pricing - Competitive pricing - Penetration pricing - Price skimming - Promotional pricing

Answer 55

Cost-plus pricing is a pricing strategy that involves working out the average cost per unit of a product and then adding a percentage markup.

Answer 56

- The method is easy to apply. - Different profit mark-ups could be used in different markets. - Each product earns a profit for the business.

Answer 57

- Businesses could lose sales if the selling price is higher than competitors' prices. - A total profit will only be made if sufficient units of the product are sold. - There is no incentive to reduce costs - any increase In costs is just passed on to the customer as a higher price.

Answer 58

Competitive pricing involves setting prices in line with your competitors' prices or just below their prices.

Answer 59

- Sales are likely to be high as the price is at a realistic level and the product is not under or overpriced. - Avoids price competition, which can reduce profits for all businesses in the industry - Often used when it is difficult for consumers to tell the difference between the products of different businesses.

Answer 60

- If the costs of production for a business are higher than those of competitors - A higher quality product might need to be sold at a price above competitors' prices to give it a higher quality image - In order to decide what this price should be, detailed research would be needed into what prices competitors are charging

Answer 61

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

Answer 62

- Often used for newly launched products to create an impact with customers - It should ensure that sales are made and the new product enters the market successfully - Market share should build up quickly.

Answer 63

- The product is sold at a low price and therefore the profit per unit may be low - Customers might get used to low prices and reject the product if the business starts to raise the price after the product's early success. - Might not be appropriate for a brand product with a reputation for quality.

Answer 64

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

Answer 65

- Skimming can help to establish the product as being of good quality - High research and development costs can be rapidly recouped from the profit made on the product at the high price - If the product is unique, a high price will lead to profits being made before competitors launch similar products

Answer 66

- The high price may discourage some potential customers from buying it - The high price and high profitability may encourage more competitors to enter the market

Answer 67

Promotional pricing is when a product is sold at a very low price for a short period of time. It would be used when a business wants to price a product at a low price for a set amount oft time to increase short-term sales.

Answer 68

- It is useful for getting rid of unwanted inventory that will not sell - It can help to renew interest in a product if sales are falling, for example during an economic recession

Answer 69

- The revenue will be lower because the price of each item will be reduced - It might lead to price competition with competitors so the business might have to reduce prices again.

Answer 70

- Price elastic demand is where consumers are very sensitive to changes in price. - A product with an elastic demand curve would have a higher change in demand than a change in price

Answer 71

- Price inelastic demand is where consumers are not sensitive to changes in price. - When a product would have a lower percentage change in demand than a percentage change in price

Answer 72

- Place = Distribution - Businesses have to decide on how to get the product to the customers - If the product is not available to consumers in convenient locations, this may cause the consumers to look for competitors' shops.

Answer 73

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

Answer 74

Producer -> Consumer (Direct to consumer)

Answer 75

- It is suitable for products such as certain types of food products, which are sometimes sold straight from the farm - There is a lower price if sold directly to consumers - Products can be sold by mail order catalogue or the internet

Answer 76

- Impractical for most products as the consumers probably do not live near the factory and could not go there to buy the products - Not suitable for products which cannot easily be sent by post - Very expensive to send products by post therefore it may not be cost effective

Answer 77

Producer -> Retailer -> Consumer

Answer 78

- Producer sells large quantities to retailers - Reduced distribution costs compared to selling directly to consumers

Answer 79

- No direct contact with customers/Loss of control - The price is often higher than 'direct selling' as the retailer has to cover its costs and make a profit

Answer 80

Producer -> Wholesaler -> Retailer -> Comsumer

Answer 81

- Wholesaler saves storage space for small retailer and reduce storage costs - Small retailers can purchase fresh products in small quantities from wholesaler because they have a relatively short 'shelf life' before they deteriorate - Wholesaler may give credit to retail customers so they can take the goods straightaway and pay at a later date - Wholesaler may deliver to the small retailer thus saving on transport costs - Wholesaler can give advice to small retailers about what is selling well

Answer 82

- May be more expensive for the small shop to buy from a wholesaler than if it bought straight from the manufacturer - Wholesaler may not have the full range of products to sell - Takes longer for fresh produce to reach the shops - Wholesaler may be a long way from the small shops - The consumer price is often higher than direct selling as both the wholesaler and retailer have to cover costs and make a profit

Answer 83

Producer -> Agent -> Wholesaler -> Retailer -> Consumer

Answer 84

- Manufacturers may not know the best way to sell products in other markets - Agents will be aware of local conditions and will be in the best position to select the most effective places in which to sell

Answer 85

The producer has less control over the way the product is sold to customers

Answer 86

Retailers are sellers of products to the general public (consumers) that operate in outlets (shops)

Answer 87

Wholesalers are businesses that purchase large quantities of products from the producer and then break the bulk of the purchases into smaller units for resale, mainly to retailers

Answer 88

An agent is an independent business or person that is appointed to deal with the sales and distribution of a product or range of products.

Answer 89

- Departments stores - Chain stores - Discount stores - Superstores - Supermarkets - Independent retailers - Direct sales - Mail order - Internet/e-commerce

Answer 90

By answering these questions: - What type of product is it? - Is the product very technical? - How often is the product purchased? - How expensive is the product? - How perishable is the product? - Where are the customers located? - Where do the competitors sell their products?

Answer 91

Promotion is the process of passing information onto consumers about the rest of the marketing mix. The information includes the info about the product, the price, and where and how the product can be bought.

Answer 92

- To inform people - To introduce a new product to the market - To compete with competitors' product - To create a brand image - To increase sales - To improve the business image

Answer 93

Advertising (Above the line) vs. Sales Promotion (Below the line)

Answer 94

Advertising paid for communication with potential customers about a product to encourage them to buy it. Advertising can either be persuasive or informative.

Answer 95

Informative advertising is where the emphasis of advertising or sales is to give full information about the products.

Answer 96

Persuasive advertising is advertising or promotion which is trying to persuade the consumer that they really need the product and should buy it.

Answer 97

1. Set objectives 2. Decide on the budget 3. Create advertising campaign 4. Select the media to use 5. Evaluate effectiveness of campaign

Answer 98

The target audience refers to people who are potential buyers of a product or service.

Answer 99

- Television - Radio - Newspapers (national or local) - Magazines - Posters/billboards - Cinema, DVD and Blu-ray discs - Leaflets - Internet - Other forms of publicity

Answer 100

- The advert will go out to millions of people - The product can be shown in a very favourable way making it look attractive - It reaches the biggest number of consumers and can reach a target audience at times when buyers are likely to watch

Answer 101

- Very expensive form of advertising - Young consumers often download films/music and may not watch many television programmes

Answer 102

- Cheaper than television - Usually reaches a larger audience - Often uses a memorable song or tune so that the advert will be remembered

Answer 103

- Cannot put across a visual message - Quite expensive relative to other methods of advertising - The advert needs to be remembered, the customer cannot look back at a hard copy at the advert - Not as wide an audience as television

Answer 104

- National newspapers are often bought by particular customers and therefore the newspaper in which the advertising is placed can be selected to target a particular group of people - A large number of people purchase and read national newspaper - Local newspapers are relatively cheap to place adverts in and are a cost-effective way to advertise - Adverts are permanent and can be cut out and kept - A lot of information can be put in the advert

Answer 105

- Newspaper adverts are often only in black and white and are therefore not very eye catching - Many young people do not purchase/read traditional newspaper

Answer 106

- Effective way to reach the target population if there are specialist magazines which cover a particular activity - Magazines adverts are in colour and therefore can look more attractive

Answer 107

- Magazines are often only published once a month or once a week - Advertising in magazines is relatively more expensive than newspapers

Answer 108

- They are permanent - Relatively cheap - They are potentially seen by everyone who passes them

Answer 109

- Can easily be missed as people go past them - No detailed information can be included in the advert

Answer 110

- Can give visual image of the product and show the product in a positive way - Relatively low cost - Can be very effective if the target audience goes to see particular films

Answer 111

- Seen by only a limited number of people who go to watch the film or buy the DVD or Blu-ray disc

Answer 112

- Cheap method of advertising - Given out in the street to a wide range of people - Direct mail - Sometimes contain a money-off voucher to encourage the reader to keep the advert - The adverts are permanent and can be kept for future reference

Answer 113

- It may not be read - Direct mail, also called "junk mail", can be annoying and put the customers off buying the product

Answer 114

- A large of information can be placed on a website which can be seen by a vast number of people at home and abroad - Orders can be made via the website - Direct mail sent via email is cheaper

Answer 115

- Internet searches may not highlight the website and it could be missed - In some countries internet access is limited - There is a lot of competition from other websites - Security issues may discourage the customers from buying online

Answer 116

- Very cheap form of advertising (delivery vehicles, T-shirts and on the sides of bags from shops, etc.)

Answer 117

- May not be seen by customers in the target market

Answer 118

- Sales promotions are incentives such as special offers or special deals aimed at consumers to achieve short-term increases in sales (below-the-line promotion)

Answer 119

- After-sales service - Free gifts/coupons - Loyalty cards - Presentations - Competitions - Free samples - product placement - BOGOF offers

Answer 120

- Can promote sales during low levels of demand - Encourages new customers to try the product - Encourages customer to buy your product rather than the competing brand

Answer 121

It depends on: - Cost - Market type - Product type - Stage in the product life cycle - Competitors promotions - Legal factors

Answer 122

It depends on: - The stage of the product life cycle - The nature of the product itself - The cultural issues involved in international marketing - The nature of the target market

Answer 123

- This refers to promoting a good image for the business and its products - Public relations can take many forms, from sponsoring events such as football matches to publicity stunts where employees or owners of the company take part in a sponsored activity for a good cause or to raise awareness.

Answer 124

Social media marketing is a form of internet marketing that involves creating and sharing content on social media networks in order to achieve marketing and branding goals.

Answer 125

Viral marketing is when consumers are encouraged to share information online about the products of a business.

Answer 126

E-commerce is the online buying and selling of goods and services using computer systems linked to the internet and apps on mobile phones.

Answer 127

The product may be changed due to new technology in the market.

Answer 128

Promotion may mainly involve using social media sites, etc.

Answer 129

The internet can be used to find out consumer habits, which can be useful for dynamic pricing.

Answer 130

Consumers can purchase online (E-commerce)

Answer 131

- Target specific demographic group - Guarantees target market sees advert - Speed in response to market changes - updated regularly - Cheap to use - May reach group difficult to reach any other way

Answer 132

- Adverts annoying to consumers - Have to pay for pop-ups - Lack of control of advertising if used by others - May be altered or used in a bad way

Answer 133

- No extra cost if the website is already setup - Control of the advertising - Can change advert quickly and up to date - Interactive adverts can attract more potential customers - Can provide more information

Answer 134

- Potential customers may not see the website - Relies on customers finding the website - Design costs of a website can be expensive

Answer 135

- Websites can be used to promote the company and its products worldwide much cheaper - Selling online makes dynamic pricing easier for businesses - Orders can be taken over then internet and sent directly to the company warehouse - Consumers might be encouraged to purchase more products than they intended by attractive and easy-to-follow websites - Businesses can also make online purchases of supplies and materials from other businesses (B2B)

Answer 136

- No need to leave to go shopping - Comparisons between prices and products or services offered can be easily made by surfing from one website to another - Payment by credit or debit card is very easy - Consumers can now easily access products and services from businesses located abroad - Consumers can buy some for prices much lower than they would be without the competition of e-commerce - Customers can buy parts or components from manufacturers without the addition of retailers profit margin - Packaging and transport costs have fallen due to competition on the internet

Answer 137

- Competition between businesses is very high due to many businesses offering e-commerce - Website design must be very clear, attractive and easy to operate - Transport costs per product sold are likely to be higher than selling through traditional shops - No face-to-face contact with customers - Consumers in most countries have the legal right to reject goods bought through e-commerce because they haven't seen, touched or worn the good - A large warehouse and efficient inventory control system are essential to fulfil consumers' orders accurately and efficiently - E-commerce is not suitable for businesses that sell personal services

Answer 138

- Consumers need access to the internet so low-income countries most likely can't access the internet - Computer systems failures or weak internet connections can result in frustrated consumers who can't access websites or make purchases - Products cannot be seen touched or tried on plus sending products is often inconvenient - No face-to-face contact with sales staff so its difficult to find more information - Many consumers are concerned about identity theft or fadulent use of credit cards if they buy goods online