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business > Section 3 - Marketing (Chap 10 - 17) > Flashcards

Section 3 - Marketing (Chap 10 - 17) Flashcards

1
Q

define marketing

A

identifying customer wants and satisfying them profitably

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2
Q

roles of marketing

A

-identifying customer needs - what they want & how much they’re willing to pay
-satisfying customer needs - to ell service & goods profitably
-maintaining customer loyalty
-anticipate changes in market - knowing new trends

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3
Q

define customer loyalty

A

existing customers continuously buy products from the same business

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4
Q

define customer relationships

A

-encouraging customers to be loyal to the business

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5
Q

what is down side of marketing on wants

A

wants are limited to how much money people have

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6
Q

define market share

A

% of total market sales owned by a business

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7
Q

benefits of a good marketing department

A

-raise customer awareness for product
–increase revenue & profitability
-increase/ maintain market share
-enter new markets
-develop/ improve products

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8
Q

rule for customers

A

customer is always king/ queen

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9
Q

difference btw a customer & consumer

A

-customer- buys products
-consumer- uses products

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10
Q

define customer

A

person who buys products

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11
Q

define consumer

A

person who buys product for personal use

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12
Q

note: company - customer - consumer

A
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13
Q

what does customer satisfaction cause

A

-value for money
-customer loyalty
-repeated purchases

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14
Q

define anticipating changes

A

making futuristic call on changes

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15
Q

define market

A

-where buyers & seller come tgt to cater to demographic

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16
Q

4 market changes

A

-technology- new products replace old ones
-taste & fashion - what people like/ trend
-income - people’s salary - affects sales on luxury items (wants)
-population - no. people & age - affects sales

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17
Q

what should businesses do if there are lots of competition

A

-globalization - operate business worldwide
-maintain good customer relations - research info on what they want
-improve existing product - to differentiate product from competitors
-new products
-lower costs = lower prices

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18
Q

why are some markets competitive

A

-globalization
-easier & cheaper transport
-e-commerce

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19
Q

define market

A

made up of customers & seller for a service/ good

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20
Q

define market segment

A

-sub groups of a market which share similar characteristics

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21
Q

ways to segment a market

A

-population - age & gender
-geographical factors
-life style
-religion
-social economic groups (classes of people)
-uses of product - how is target for which method use of product

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22
Q

how to decide how to segment market

A

-analyze market size & potential sales
-company branding - which customers to cater to
-cost to enter each segment

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23
Q

benefits of market segments

A

-cost effective marketing expenditure by meeting targeted customers = higher sales
-opportunities to increase sale by identifying a market segment with needs not fully met

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24
Q

2 types of market

A

-niche market
-mass market

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25
Q

advantages & disadvantages of mass market

A

advantages:
-can benefit from economies of scale (EOS)
-opportunity for growth from high sales
-more safe
disadvantages:
-high competition
-high cost for advertisement & promotion
-may not meet specific needs for all customers

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26
Q

advantages & disadvantages of niche market

A

advantages:
-small businesses can successfully sell because larger business may have not identified them = less competition
-meets customers specific needs = customer loyalty & good customer relations
disadvantages:
-small market = limited sales potential
-usually businesses here specialize in 1 product = risk when product not in demand

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27
Q

define mass market

A

-market with large number of sales of general products for everyone

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28
Q

define market research

A

-process of gathering, analyzing & interpreting info. about the market (before selling)

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29
Q

define niche market

A

-market segment for specialized products & people are willing to pay a high price for it
-short lived - based on trends
-more profits

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30
Q

define product orientated

A

-making & selling a product without market research
-less cost, time, effort
-make general products

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31
Q

define market orientated

A

-doing market research before making product
-more success (but not guaranteed)

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32
Q

define marketing budget

A

-financial plan for marketing a product so the marketing department know how much it may spend

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33
Q

2 types of market research

A

-primary research
-secondary research

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34
Q

define primary research

A

collecting original data by contacting potential customers directly

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35
Q

advantage & disadvantages of primary research

A

advantage:
-first hand info
-new & specific info.
-accurate & reliable
-not available to other businesses
disadvantage:
-more time, effort, expensive

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36
Q

advantage & disadvantages of secondary research

A

advantages:
-cheaper
-assess total market size
-quick
disadvantages:
-old & not specific info.
-available to all businesses
-irrelevant data = unreliable

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37
Q

define secondary research

A

using info that has already been collected & available to other businesses

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38
Q

examples of internal secondary research

A

-finance department
-customer service department
-sales reports

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39
Q

examples of external secondary research

A

-newspaper
-gov. statistics
-online sources
-competitors website

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40
Q

define focus groups

A

-people who are represent the target market

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41
Q

eg of primary research

A

-interviews - direct, timely & costly, can lie, may forget, body language
-questionnaires - easy, misleading Qs, more detailed info, may lie
-online surveys - fast, easy, misleading Q, lie
-focus groups - costly, detailed info, cheaper than individual interviews, time consuming

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42
Q

define sampling

A

groups of selected people who respond to a market research
(only in primary research)

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43
Q

define random sample

A

people selected randomly as a source of info for market research

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44
Q

define quota sample

A

specific people selected as a source of info for market research

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45
Q

ways to choose sampling

A

-random - for general products - varied & biased responses - unreliable
-stratified - specific people - more meaningful responses
-quota - people are choose specifically - specific responses

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46
Q

factors that influence accuracy of market research

A

-sample selected & size of it
-wording of questions
-Primary / secondary research
-bias
-who did research

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47
Q

ways to present data

A

-table/ tally chart
-diagram
-line graphs
-charts - pie, bar

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48
Q

define marketing mix

A

-4 key activities that make marketing a product/ service successful
-Product
-Price
-Promotion
-Place

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49
Q

types of output

A

-consumer goods
-producer goods
-consumer service
-producer service

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50
Q

define consumer goods

A

goods bought by consumers for their own use

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51
Q

define producer goods

A

goods make for other businesses to use

52
Q

define consumer service

A

service used by consumers

53
Q

define producer service

A

service for other business

54
Q

what makes a product successful

A

-satisfy customer needs & wants
-good quality
-production cost is relative to price
-fitting of brand
-long lasting

55
Q

stages of product development

A

-generating ides - brain storm/ brain still
-select ideas - for further research
-feasibility - decide if product is worth selling by considering the resources, profit and capacity to produce
-develop a prototype
-launch product in test market
-full launch of product

56
Q

define feasibility

A

deciding if product is worth selling by considering the resources, profit and capacity to produce

57
Q

Ways to brand

A

-brand image
-logo
-colour
-music
-name
-font

58
Q

define UPS

A

-Unique, Selling, Point (all products need this)
-special feature of a product that differentiates it form others

59
Q

advantages & disadvantages of making new products

A

advantages:
-UPS
-more range of products to sell
-expand into new/ existing markets
disadvantages:
-cost for market research
-cost to make prototype
-risk of lack of sales
-loss of company image if product doesn’t meet customer needs

60
Q

define brand image

A

identity of product which distinguishes it from other products

61
Q

uses of branding

A

-creates a distinction
-gives product identity

62
Q

define product life cycle

A

stages a product goes through form introduction to decline of it

63
Q

stages of a product life cycle

A

-development - making product - no, sales, unprofitable, expensive
-introduction - informative ads, risky, low sales, unprofitable, expensive
-growth - product is accepted - more sales, expensive, competition
-maturity - max sales, lots of competition, no need for ads
-saturation - too much competition, low sales, ads again
-decline - low sales, think of replacing product, discontinue (remove stocks)

64
Q

ways to extend product life cycle

A

-new variation - eg, flavours
-new packaging - eg, diff colour/ shapes
-find new uses for it
-find new markets - eg, export
-reduce price/ discounts
-promotion

65
Q

define extension strategy

A

keeping maturity stage & extending life cycle of a product

66
Q

define packaging

A

physical wrapping of product, also used for promotion & selling appeal

67
Q

uses of packaging

A

-protect goods - eg, export/ import, suitable for product to fit in
-attraction - eg, eye catching, promotes brand image
-information - eg, nutrition value
-convenience - eg, easy to carry

68
Q

define crowd funding

A

-people willing to invest even though they haven’t seen the product

69
Q

define price

A

what customer pays for a product
-if brand loyalty, price don’t matter
-value of money = repeated purchases

70
Q

methods of pricing

A

-skim pricing - high price for unique product, profit before competition start = recover cost (objective)
-penetration pricing - low price for product, more sales (objective), eg. necessary good
-promotional pricing - give discounts/ gifts with products, more sales/ remove goods (objective)
-competitive pricing - price as competitors price, +/- depending on quality
-cost plus pricing - find cost of product & add profit wanted
-dynamic pricing - price change depending on demand eg. aeroplane tickets

71
Q

define dynamic pricing

A

businesses change product prices depending on level of demand

72
Q

define cost plus pricing

A

cost of producing product plus a profit mark

73
Q

advantages & disadvantages of cost plus pricing

A

advantages:
-easy to apply
-diff profit mark up for diff markets
disadvantages:
-lose sales if price is higher than competitors
-total profit only made if enough units sold

74
Q

define competitive pricing

A

product priced just below competitors to capture mor market

75
Q

define promotional pricing

A

product sold as low price for a period of time

76
Q

advantages & disadvantages of competitive pricing

A

advantages:
-likely high sales since price is realistic
-used when it’s difficult for consumer to tell diff btw businesses
disadvantages:
-production cost could be higher than competitors = loss
-high quality need to to sold above competitors price

77
Q

advantages & disadvantages of promotional pricing

A

advantages:
-removing unwanted inventory
-renew interest in product
disadvantages:
-low profit
-pricing competition with competitors = reduce pricing again

78
Q

define penetration pricing

A

price is lower than competitor when entering a new market

79
Q

advantages & disadvantages of penetration pricing

A

advantages:
-creates impact with customer
-ensures sales = product successfully enter market
-market share builds up
disadvantages:
-low profit
-customers used to low price & reject it when price goes up
-not appropriate for brand image/ product quality

80
Q

advantages & disadvantages of price skimming

A

advantages:
-establishes product as good quality
-cost for product making can be recouped quickly from high price of product
-if unique, lots of profit before competitors launch similar products
disadvantages:
-high price discourage potential buyers
-high profitability encourages competitors in market

81
Q

define price skimming

A

high price set for new product in the market

82
Q

define price elasticity of demand

A

-how responsive the demand for a product is when it’s price changes

83
Q

define elastic demand

A

consumer sensitive to price change
-small change in price causes big change in demand
-eg, luxury goods

84
Q

define Inelastic demand

A

consumer insensitive to price change
-demand does not change much when price changes
-eg, necessary goods

85
Q

define promotion

A

-marketing with aims to raise customer awareness of product/ brand to make more sales

86
Q

aims of promotion

A

-introduce new products to market
-compete with competitors products
-improve company image
-increase sales
-create brand image

87
Q

define advertising

A

communicating with potential customers to encourage them to buy a product
-informative
-persuasive

88
Q

define informative advertising

A

emphasizes on giving information on product

89
Q

define persuasive advertising

A

persuading customers that they really need the product

90
Q

define target audience

A

potential customers

91
Q

medias for advertising

A

1) TV - lots of viewers, product can look attractive, reach biggest target audience can show demo/ expensive depending on prime time = most viewership hours, young people don’t watch often
2) radio - cheaper than TV, large target audience, can uses memorable tune/
no visual msg, expensive
3) newspapers - large target audience, newspapers are cheap = cost effective, can put lots info/ only black & white = not eye-catching, young people don’t read
4) billboards - permanent, cheap, potentially seen by passerby, attractive, lots of colours = seen/
can easily be missed, no detailed info
5) internet - can put lots of info, order can be made instantly, direct mail sent is cheap/
internet access limited to some countries, lots of competition, security issues
6) movies: before & after intermission

92
Q

ways to promote

A

-advertising
-sales promotion
-public relations

93
Q

define sales promotion

A

special offers for short term increase in sales

94
Q

types of sales promotio

A

-after- sales service = assurance that product will be taken back/ repaired without charge
-gifts = usually for children
-Buy One Get One Free
-price reduction = linked to loyalty cards/ flash sales
-entering competition
-free samples
-Point of Sales Display

95
Q

advantages of sales promotion

A

-promote sales when sales are low
-encourages new customers
-encourages existing customers to buy more
-encourages customers to buy from you than competitor

96
Q

what is above the line promotion

A

-positive methods of promotion
-ads - sponsoring
-public relation - creating a positive image by doing good things

97
Q

what is below the line promotion

A

-negative methods of promotion
-sales promotion - give something additional to increase sales (usually for products with ending shelf life eg, sample, buy 1 get 1 free, gift, coupon, lottery

98
Q

define Point Of Sales Display (POS)

A

-products specifically placed around the entrance/ counter to entice buyer

99
Q

define Public relations

A

-creating a positive image by doing good things to increase sales
-good for negative products - eg, beer, cigar
eg. raising awareness, sponsoring, donating

100
Q

examples of direct marketing

A

eg. door to door selling, spam emails, social media

101
Q

define marketing budget

A

financial plan for marketing a product for a period of time

102
Q

note: businesses need online presence & reviews

A
103
Q

define free publicity

A

people say good things about products without the company having to give them money

104
Q

what kind of products are usually distributed

A

general products more than specialized products

105
Q

types of channels of distribution

A

-direct to customers
-using a retailer
-using a retailer & a wholesaler

106
Q

advantages & disadvantages of channels of distribution: direct to customer

A

advantages:
-simple channel
-suited for some products eg. food
-lower price if sold directly
disadvantages:
-impractical because of distance btw factory & customers
-not suitable for products easily sent by post
-expensive to send by post = not cost effective

107
Q

advantages & disadvantages of channels of distribution: using a retailer

A

advantages:
-sell larger quantities
-less distribution cost compared to selling directly to customers
disadvantages:
-no direct contact with customers
-price is higher than direct selling because retailers have to make a profit

108
Q

advantages & disadvantages of channels of distribution: using a wholesaler & retailer

A

advantages:
-wholesalers save storge for retailers = less storage costs
-retailers have fresh products
-wholesalers may give credit to retailers
-wholesaler may deliver products = transportation costs
disadvantages
-more expensive for shop to buy from wholesaler than factory
-take longer for fresh produce to reach shop
-

109
Q

define agent

A

appointed independent person/ business who deals with sales & distribution of products

110
Q

advantages & disadvantages of agent

A

advantages:
-manufacture may not know best way to sell product
-agents more aware of most effective places to sell
disadvantages:
-producer has less control

111
Q

example of places of distirbution

A

-department stores
-supermarkets
-e-commerce/ internet
-mail order

112
Q

channels of distribution & their roles in order

A

-manufacturer - makes product
-whole seller - sells products in bulk (cheaper in bulk = can negotiate prices), experts of distribution
-retailer - shop owners
-customer/ consumer

113
Q

factors affecting distribution channels

A

-type of product
-how often product is purchased
-how expensive product is
-how perishable product is/ shelf life
-where customers are located
-where competitors sell products

114
Q

how has technology affected the marketing mix = good & (bad)

A

Products = better stronger, long lasting
Promotion = viral marketing, cookies, history, range of customers, cheap, (short attention span)
Place = changes the pricing to dynamic pricing
Packaging = more protective

115
Q

which role takes the most risk during distribution of products

A

-retailers can return product to whole sellers but whole sellers cannot return back to manufacture

116
Q

define marketing strategy

A

plan with the right combination of marketing mix to make a product successful

117
Q

legal controls when marketing

A

1) cannot give wrong weights & measures
2) trade description = wrongly described product
3) sale of goods = product should fit for its purpose (no defects)
4) sale = right price & no illegal goods advertised
5) no lying about supply of goods & services

118
Q

define social media marketing

A

internet marketing by creating/ sharing content

119
Q

advantages & disadvantages of business having their own website

A

advantages:
-control advertising
-can change adverts quickly
-provide more info
disadvantages:
-people may not see website because of lots of search results
-relies on customer finding website
-website design cost
-maintaining website domain

119
Q

define e-commerce

A

buying & selling on the internet

119
Q

advantages & disadvantages of e-commerce

A

advantages:
-low cost promotion
-global coverage
-access many customers
-convenience
-easy to pay
disadvantages:
-setting up website costs money
-technical problems
-competition from other websites
-need internet access

120
Q

advantages & disadvantages of advertising on social media

A

advantages:
-can reach target audience
-updated info = speed response to market changes
-cheap
disadvantages:
-can be found annoying
-lack of control of advertising if used by others
-messages can be altered

121
Q

define marketing strategy

A

combining the right marketing mix for a product/ service

122
Q

examples of marketing objective

A

-increase sale by selling to new markets
-increasing sales by improving product
-increasing/ maintaining market share

123
Q

advantages & disadvantages of entering new markets in other countries

A

advantages:
-greater growth potential
-home market may be saturated = new market has chance of higher sales
-wider choice of location
disadvantages:
-lack of knowledge of consumer habits & competitors
-cultural differences
-instable exchange rates
-import restrictions
-increased transportation cost

124
Q

ways to overcome entering new markets in other countries & their advantages & disadvantages

A

method = advantages/ disadvantages
1) licensing = allow company in new market to product products under the license
products not physically transported = save time & transportation costs/ quality problems
2) international franchising = foreign franchise operate franchise in new market
local knowledge of place/ quality problems, training workers

business (10 decks)

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