Section 3 - Marketing

Question 0

what is the role of marketing

Answer 0

identify customer needs, satisfy customer needs, maintain customer loyalty, gain information about customers, anticipate changes in customer needs,

Question 1

Market share

Answer 1

The percentage of total market sales held by one brand or business

Question 2

What are the sections of the marketing department

Answer 2

The sales department, the market research department, the promotion department, the distribution department

Question 3

Why do consumer/ customer spending patterns change

Answer 3

Consumer tastes and fashion change, changes in technology, change in incomes, aging populations

Question 4

Why do markets become more competitive?

Answer 4

Globalisation, transportation inmprovements, internet/ e-commerce

Question 5

How can businesses adapt to changing spending patterns and increase competition?

Answer 5

Maintain good customer relationships, keep improving on existing products, bring out new products to keep customers’ interest, keep costs low to maintain competitiveness

Question 6

Mass market

Answer 6

Where these is a very large number of sales of a product

Question 7

Niche market

Answer 7

small, usually specialised, segment of a much larger market

Question 8

market segment

Answer 8

an identifiable sub-group of a whole market in which consumers have similar characteristics or preferences

Question 9

Ways to segment a market

Answer 9

socio-economic group, age, region/location, gender, use of product, lifestyle

Question 10

product orientated business

Answer 10

one whose main focus of activity is on the product itself

Question 11

market-orientated business

Answer 11

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

Question 12

marketing budget

Answer 12

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 know how much they may spend.

Question 13

Why is market research needed?

Answer 13

a business can identify customer needs in a changing and competitive international environment. This is essential if a business is to remain competitive

Question 14

market research

Answer 14

the process of gathering, analyzing and interpreting information about a market

Question 15

primary research

Answer 15

the collection and collation of original data via direct contact with potential or existing customers. Also known as field research. You can use a questionnaire, interview, focus group or observation

Question 16

secondary research

Answer 16

information that has already been collected and is available for use by others. Also known as desk research.

Question 17

questionnaire

Answer 17

a set of questions to be answered as a means of collecting data for market research
+detailed qualitative information can be gathered about the product or service +customer opinions obtained +can be done online +link to prizes
-the question must be very clear -takes time and money -collating/ analysing is time consuming

Question 18

Interviews

Answer 18

when interviews are used, the interviewer has ready prepare questions for the interviewee
+able to explain questions +detailed information
-the interviewer can give unconscious bias -time consuming and expensive

Question 19

Sample

Answer 19

a group of people who are selected to respond to a market research excercise, eg a questionnaire. A random sample is when these people are selected at random. A quota sample is when they are selected based on characteristics.

Question 20

Focus group

Answer 20

a group of people who are representative of the target market
+provide detailed information about consumers’ opinions
-time-consuming and expensive
-people could be biased from external people

Question 21

observation

Answer 21

recording, watching and audits of how people use products
+inexpensive
-only gives basic figures, does not provide reasons for data

Question 22

internal sources of information

Answer 22

Information readily available from firm’s own records. Can be used for secondary research eg sales records, public relations opinions, finance department information

Question 23

External sources of information

Answer 23

information obtained from outside of the company. Inevitably general and unspecific in nature. eg government statistics, newspaper articles, trade association, market research agency, internet

Question 24

what makes accurate information?

Answer 24

phrasing of questions, size of sample, sample selected, pilot surveys, how information was gathered, bias, age of information

Question 25

marketing mix

Answer 25

a term used to describe all the activities which go into marketing a product or service. These activities are often summarised as the four 'P's: product, price, place and promotion

Question 26

Types of products

Answer 26

consumer goods, (goods consumed by people ie food or furniture); consumer services, (services produced for people ie education hairdressing); producer goods, (good produced for other businesses eg machinery); producer services, (services produced to help other businesses)

Question 27

What makes a product successful?

Answer 27

satisfies existing needs and wants of customer design - performance, reliability, quality should all be consistent with the products brand image capable of stimulating new wants from the consumer not too expensive to product first business to produce the new product or introduce new version distinctive or different

Question 28

Unique selling point

Answer 28

the special feature that differentiates it from the products of competitors

Question 29

benefits of developing new products

Answer 29

USP means business will be first into market with new product diversification of business expand into new markets expand into existing markets

Question 30

costs of developing new products

Answer 30

carrying out + analysing market research; producing trial products lack of sales if target market wrong loss of company image

Question 31

Brand name

Answer 31

the unique name of a product that distinguishes it from other brands

Question 32

brand loyalty

Answer 32

when consumers keeps buying the same brand again and again instead of choosing a competitor's brand

Question 33

brand image

Answer 33

an image or identity given to a product which gives it a personality of its own and distinguishes it from its competitos' brands

Question 34

packaging

Answer 34

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

Question 35

what is the product life cycle

Answer 35

``` the stages a product will pass through. development Introduction Growth Maturity Saturation Decline ```

Question 36

how to extend product life cycle

Answer 36

``` introduce new variations of original product sell into new markets change design, colour or packaging update advertising caimpaign introduce new, improved version sell through additional outlets ```

Question 37

A business would adopt a new pricing strategy to:

Answer 37

try to break into new market try to increase its market share try to increas its profits make sure all its costs are covered and profit is earned

Question 38

Cost plus pricing

Answer 38

the cost of manufacturing the product plus a profit mark-up +this method is easy to apply -you could lose sales if selling price is higher that competitors

Question 39

competitive pricing

Answer 39

when the product is priced in line or just below competitors' prices to try to capture more of the market +sales are likely to be high -research required costs time and money

Question 40

penetration pricing

Answer 40

used when trying to enter a new market. The price would be set lower than competitors' prices. +ensures sales are made -profit is low

Question 41

price skimming

Answer 41

where a high price is set for a new product on the market for its novelty, quality and to pay back lots of research and development costs +help establish the product as good quality -high price puts off potential customers

Question 42

promotional pricing

Answer 42

when the product is sold at a very low price for a short period of time +useful for getting rid of unwanted stock +helps renew interest in a business if sales are falling -low sales revenue

Question 43

psychological pricing

Answer 43

an approach when particular attention is paid to the effect of the number on customers perception of the product - eg charging a high price so that it becomes a status symbowl - eg charging 99 cents instead of 1 dollar to seem cheaper - eg supermarkets charge low price for common items to seem like it gives god value

Question 44

dynamic pricing

Answer 44

when customers are split into two or more groups and charged different prices for the same things due different price sensitivities. eg airplanes charging more at christmas +increased sales revenue and proft +all "seats" are filled -costs money to change price -customer has to search around for best price

Question 45

price elasticity

Answer 45

a measure of the responsiveness of demand to a change in price inelastic - if price changes, demand doesn't change very much eg petrol elastic - if price changes, demand changes significantly eg chocolate bars

Question 46

aims of promotion

Answer 46

to inform people about particular issues (ie governments) to introduce new products on to the market to compete with competitors' products to create a brand image to increase sales to improve the company image

Question 47

informative advertising

Answer 47

where the emphasis of advertising or sales promotion is to give full information about the product eg this shower filter uses carbon technology to purify water

Question 48

persuasive advertising

Answer 48

advertising or promotion which is trying to persuade that consumer that they really need the product and should buy it eg models in our commercials use this product so if you want to be cool like models you should use it too.

Question 49

the advertising process

Answer 49

1. set objectives (the purpose of the advertising) 2. decide the advertising budget (usually between 2 and 20 percent of expected sales revenue) 3. create an advertising campaign 4. select the media to use (posters? tv ads? which is most cost effective?) 5. Evaluate the effectiveness of campaign (did sales increase?)

Question 50

target audience

Answer 50

refers to people who are potential buyers of a product or service

Question 51

+ve and -ve of advertising using television

Answer 51

``` +millions of people will see it +makes product/ service look attractive +can target audience with tv programmes -very expensive eg household products, cars, food ```

Question 52

+ve and -ve of advertising using radio

Answer 52

``` +cheaper than tv +reaches large audience +uses tune -no visuals -expensive -must be remembered bc no hard copy -not as many people as tv eg local services/ events ```

Question 53

+ve and -ve of advertising using newspapers

Answer 53

+can put advert in target markets newspaper +reaches lots of people +cheap +people can cut them out and save +can convey lots of information -not very eye catching (black and white) eg local events, local products or cars, national banks

Question 54

+ve and -ve of advertising using magazines

Answer 54

``` +very effective for reaching target audience (eg bike advert in bike magazine) +in colour/ attractive -published infrequently -more expensive than newspapers eg specialist products ```

Question 55

+ve and -ve of advertising with: posters or billboards

Answer 55

``` +permanent +cheap +seen often -easy to miss -cant convey lots of info eg common products or local events ```

Question 56

+ve and -ve of advertising with: cinema or dvd

Answer 56

``` +visual +low cost +easy to target target audience -seen by limited people eg film trailers or coca cola ```

Question 57

+ve and -ve of using leaflets to advertise: leaflets

Answer 57

``` +cheap +given to wide range of people +permanent -may not be read -annoys potential customers eg local events, retail outlets ```

Question 58

+ve and -ve of advertising with: internet

Answer 58

``` +conveys lots of information +orders can be made instantly +email adverts free/cheap -seo may not work -limited internet in some countries -lots of competition -customers may distrust buying things online eg familiar goods, insurance, transport tickets ```

Question 59

+ve and -ve of advertising with other forms of puiblicity

Answer 59

+very cheap eg tshirts, bags, delivery vehicles -may not be seen by customers in target market eg retail

Question 60

+ve and -ve of advertising using product placement

Answer 60

+products are associated with the image in the programme or movie +can target a specific audience who view the programme, movie or music video -expensive -negative effects on the consumer if image is unnattractive eg fancy cars, pomegrante juice

Question 61

sales promotion

Answer 61

incentives such as special offer or special deals aimed at consumers to achieve short term increase in sales

Question 62

types of sales promotion

Answer 62

Gifts (stickers inside cereal boxes) Buy one get one free (BOGOF) Competitions (charlie and the chocolate factory) point of sale displays and demonstrations (special display of product) after sales service (free oil change for buying a car???) free samples (!!!)

Question 63

advantages of sales promotion

Answer 63

helps during off season encourages new customers encourages existing customers to buy more frequently encourages customers to choose you over competion

Question 64

marketing budget

Answer 64

a financial plan for the marketing of a product of product range for a specified period of time

Question 65

what to consider when choosing promotion

Answer 65

stage of product life cycle (ie new = informative, mature = persuasive) nature of product culture (especially when marketing international products) nature of target market (dont advertise childrens toys on the radio)

Question 66

+ve and -ve of advertising on social media

Answer 66

``` +reach specific demographic +hard to miss +updated regularily +cheap +reaches certain groups that are hard to reach -annoying -pop ups cost money -lack of control (ie google adverts) ```

Question 67

+ve and -ve of advertising on own website

Answer 67

``` +free +control +can be updated frequently +can be interactive + fun +conveys lots of information -seo may not work well -design costs high -relies on customers finding website ```

Question 68

distribution channel

Answer 68

the means by which a product is passed from the place of production to the customer or retailer

Question 69

Producer->consumer distribution channel

Answer 69

+simple, suitable for perishable products, lower prices, easy with mail and internet -impractical bc consumers do not live next to factory, some items cant be sent via post, expensive to post thing

Question 70

producer->retailer->consumer distribution channel

Answer 70

+sold in large quantities +reduced distribution costs -no direct contact with consumers

Question 71

producer->wholesaler->retailer->consumer distribution channel

Answer 71

+no storage costs, retailers can buy small quantities, trade credit, wholesaler can advise retailer -more expensive for retailer, wholesaler might not have full range, not good for perishables, wholesaler can be miles away

Question 72

producer->agent->wholesaler->retailer->consumer

Answer 72

+easy for producer +most efficient for producer bc agent is clever -less control

Question 73

agent

Answer 73

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

Question 74

e commerce

Answer 74

the buying and selling of goods and services using computer systems linked to the internet

Question 75

methods of distribution

Answer 75

department stores, chain stores, discount stores, superstores, supermarkets, direct sales, mail order, internet/ e commerce

Question 76

opportunities of e commerce to business

Answer 76

websites can be used to promote the company cheaply orders can be takes over computer consumers easy to encourage to buy more business to business commerce is efficient

Question 77

opportunities of e commerce to consumers

Answer 77

no need to leave the house comparison between prices and products is easier payment via credit/ debit card easy consumers can buy foreign goods

Question 78

threats of e commerce to business

Answer 78

Globalisation leads to high competition website design expensive transport costs are expensive no face to face contact so must conduct market research returns are common and expensive large warehouse required doesnt work for services eg hair dressing

Question 79

threats of e commerce to consumers

Answer 79

``` internet required system failure is frustrating products cannot be tested/touched/tried on extra information is hard to get identity theft is a threat ```

Question 80

factors affecting which distribution channel to choose

Answer 80

``` 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 customers located? where do competitors sell their products? ```

Question 81

marketing strategy

Answer 81

a plan to combine the right combination of the four elements of the marketing mix for a product or service to achieve a particular marketing objective

Question 82

what are some common marketing objectives?

Answer 82

increasing sales of existing product/ services in new markets increasing sales by improving existing product increase market share maintain market share increase sales in niche markets

Question 83

how to enter new markets abroad

Answer 83

joint ventures, licensing (business lets other business sell patented products), international franchising, localising existing brands (eg mcdonalds selling sides of rice in Thailand and spicier sauces)

Question 84

opportunities of entering new markets abroad

Answer 84

growth potential, home market saturated, wider choice of location, trade barriers lowered

Question 85

problems of entering new markets abroad

Answer 85

lack of knowledge, cultural differences, exchange rate changes, import restrictions, increased risk of non-payments, increased transport costs

Question 86

legal controls on marketing

Answer 86

weights and measures, trade description and flaws must be recorded accurately. distance selling regulations (customers have seven days to return product). illegal to make misleading price claims.