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AQA A-Level Business > Section 3 - Marketing Performance > Flashcards

Section 3 - Marketing Performance Flashcards

1
Q

What are marketing objectives?

A

goals/targets set by the marketing dept.

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2
Q

Why are marketing objectives important?

A
  • help set direction of the business
  • ensure the customer has a good experience
  • ensure the business makes a profit
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3
Q

What do marketing objectives need in order to be successful?

A
  • need to be SMART
  • good fit with mission statement and general objectives
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4
Q

Define sales volume

A

number of products or services sold (whole numbers)
eg. 150,000 cars in 2019, 2,812 pizzas in april

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5
Q

Define sales size

A

$$$ revenue earned from selling products or services
eg. $250k selling ice cream, $2m in sales

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6
Q

Define market growth

A

the percentage growth in the size of the market, measured over a specific period.

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7
Q

What is the equation for market growth?

A

(market size (year 2) - market size (year 1) / market size (year 1)) x100

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8
Q

Define market size

A

the total number of potential buyers for your product, the value

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9
Q

Define sales growth

A

a measure of the change in revenue over a fixed period of time

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10
Q

What is the equation for sales growth?

A

(sales (year 2) - sales (year 1) / sales (year 1)) x 100

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11
Q

Define market share

A

the percentage of a market’s total sales, that is earned by a particular company over a specified time period

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12
Q

What is the equation for market share?

A

(sales of business / total market sales) x 100

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13
Q

Define brand

A

a name, sign, symbol, design or slogan linked to a particular product or service to differentiate from competition.

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14
Q

Define brand loyalty

A

repeat purchases of a particular brand based on the perception of higher quality and better service than any competitor

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15
Q

Name 4 external influences on marketing objectives

A
  • PESTLE factors
  • nature of the market
  • amount of competition in the market
  • ethics
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16
Q

Define external influences on marketing objectives

A

outside the business that may have an impact on the marketing objectives that are set

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17
Q

Define internal influences on marketing objectives

A

anything that is inside the business and under the control of the owners

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18
Q

Define market mapping

A

process of finding the variables which differentiate brands in a market and then plotting them on a map

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19
Q

What is market mapping used for?

A
  • to identify gaps in the market
  • work out who the competitors are
  • position the product in the market (eg. Pricing)
  • decide what to sell
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20
Q

Define market research

A

researching the conditions of the market (eg. Customers, competitors etc)

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21
Q

How can quantitative data be collected?

A
  • questionnaires conducted to gather numerical data
  • data displayed with charts, graphs as statistics and percentages
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22
Q

How can qualitative data be collected?

A
  • focus group discussions
  • interview consumers on their thoughts about a product
  • observations of buyer behaviour (eg. Only family groups bought the squash)
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23
Q

What does quantitative research do?

A

measures response more quickly, info clearer by asking questions to large sample

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24
Q

What does qualitative research do?

A

uses open-ended questions to find out a lot of information

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25
Q

Describe primary research

A
  • data collected first hand
  • new data gathered for benefit of the business
  • specific to the needs of the business
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26
Q

Define secondary research

A

gathering data which already exists – desk research
- can be biased and outdated

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27
Q

Name the 7Ps

A

Product
Price
Promotion
Physical environment
People
Place
Processes

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28
Q

Define PED

A

the responsiveness of demand to changes in price

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29
Q

Describe the 2 types of PED

A

Elastic - as price rises, demand falls
Inelastic - as price rises, response in demand remains the same (essential goods)

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30
Q

What can PED be used for?

A
  • help set the price that will sell the most while making profit
  • evaluate the impact of changes in price on sales and revenue
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31
Q

State the values of PED

A
  • all PED values are negative
  • elastic: values greater than 1 (eg. -1.27, -6)
  • inelastic: values between 0 and -1 (eg. -0.7, -0.005)
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32
Q

How is % change calculated?

A

% change = (new - old / old) x 100

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33
Q

How is PED calculated?

A

% change in Q / % change in P (q=quantity, p=price)

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34
Q

Define YED

A

the responsiveness of demand to a change in income

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35
Q

How is YED calculated?

A

% change in Q (demand) / % change in Y (income)

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36
Q

State the values for YED

A

greater than 1 = income elastic
between 0 and 1 = income inelastic
less than 0 = inferior goods

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37
Q

Describe the YED of a luxury good

A
  • increased income leads to bigger percentage increase in demand
  • YED value for luxury goods is greater than 1 (0< YED <1)
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38
Q

Describe the YED of a normal good

A
  • consumer demand increases when income increases
  • YED values for normal goods are positive (YED >0)
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39
Q

Describe the YED of an inferior good

A
  • increased income leads to fall in demand
  • eg. someone gets a promotion and buys champagne rather than cheaper beer
  • YED values for inferior goods are negative (YED <0)
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40
Q

Define segmentation

A

the process of dividing the whole market into smaller parts

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41
Q

What does segmentation allow a business to do?

A

enables the business to effectively target its products and services at the right customers.

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42
Q

Why might a business use segmentation?

A

allows business to confidently talk about things that matter based on:
- characteristics
- behaviour (buying habits)
- via flyers, social media etc.
- the more that is known about the target market, the better chances of success

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43
Q

What is the value of segmentation?

A
  • specific customer groups can be targeted with appropriate products to satisfy needs and wants
  • differentiated products - separating from the rest of the market, being different
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44
Q

Define targeting

A

way of identifying a group of people with similar characteristics and aiming an advertising message at them on a platform they might use

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45
Q

What is the value of targeting?

A

businesses develop objectives and a strategy to work out how to communicate with that segment

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46
Q

Define positioning

A

to promote and advertise a product or service in a specific market segment

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47
Q

What is the value of positioning?

A
  • product or service is promoted to target segments
  • promotions may be to inform, remind, engage or call to action
  • positioning educates customers about features and benefits of products
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48
Q

Name 5 segmentation methods

A
  • demographics (age)
  • geographics (religion, location, weather)
  • income (annual salary, type of job)
  • social class (upper class, unskilled)
  • behaviour (lifestyle/buyer behaviour)
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49
Q

Define mass markets

A

a market that is aimed at the general population (eg. Toothpaste)

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50
Q

What are the characteristics of a mass market

A
  • products sold to consumers in the same way
  • many products can be sold on global scale with just a few language tweaks
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51
Q

What are some advantages of mass marketing?

A
  • large scale production means economies of scale and lower average unit costs
  • straightforward marketing - everyone equally targeted
  • large volume of sales means high revenue
  • high revenues can be pumped into R&D
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52
Q

What are some disadvantages of mass marketing?

A
  • lots of competition
  • homogenous products need to be differentiated through marketing = expensive
  • high volume production not flexible to demand changes
53
Q

Why is branding important in mass markets?

A

to differentiate from competition (eg. Heinz ketchup vs own brand)

54
Q

Define niche markets

A

specific subset of main market - addresses specialist needs (eg. Sensodyne toothpaste)

55
Q

What are the characteristics of a niche market

A
  • caters to particular segment of market that is not being met by other providers
  • can charge a higher price as there isn’t much competition
  • specific target market
56
Q

What are some advantages of niche markets

A
  • can charge premium pricing
  • easier to target customers
  • small scale of production can be flexible
  • follow trends
  • less competition
57
Q

What are some disadvantages of niche markets

A
  • risky as demand may not be constant
  • higher unit costs - no economies of scale
58
Q

What does a star signify in the Boston Matrix?

A
  • high market share, high market growth
  • need to maintain current marketing spend to keep sales high
  • should become cash cows in time if managed correctly
59
Q

What does a dog signify in the Boston Matrix?

A
  • low market share, low market growth
  • require no investment - decline phase of their life cycle
  • may become obsolete or replaced
  • businesses may consider discontinuing or withdrawing products
60
Q

What does a cash cow signify in the Boston Matrix

A
  • high market share, low market growth
  • good sellers - little to no investment needed
  • products are milked for cash
  • needs monitoring - at risk for becoming a dog
61
Q

What does a question mark/problem child signify in the Boston Matrix

A
  • low market share, high market growth
  • potential to become stars if managed correctly
  • require a lot of investment in marketing and promotion in order to succeed
62
Q

What are the advantages of using the Boston Matrix grid

A
  • good starting point when reviewing an existing product line to decide future strategy and budgets
  • conclusions drawn from this analysis transfer surplus cash from cash cows to the stars and question marks.
  • dogs are closed down or sold.
  • question marks reveal as either dogs or stars, cash cows become drained of finance and turn into dogs.
63
Q

What are the disadvantages of using the Boston Matrix grid

A
  • products may not be low or high - they could be somewhere in the middle
  • high market share does not always lead to high profits - high costs are involved
  • argued that the matrix is too simple
64
Q

Define promotion

A

the use of marketing strategies to bring a product/service to the attention of potential buyers

65
Q

Describe personal selling

A
  • an e ffective way to manage business-to-consumer relationships.
  • products with relatively high prices, or with complex features, are often sold using personal selling.
66
Q

What are the advantages of personal selling

A
  • salespeople are well-trained in the approaches and techniques of personal selling
  • high customer attention
  • adaptable
67
Q

What are the disadvantages of personal selling

A
  • salespeople are expensive; require training on top of their salary
  • only reaches a limited number of
    customers
  • labour Intensive
68
Q

Describe direct marketing

A
  • may include special o ers to re-engage existing customers.
  • items carefully tailored to consumers based on previous buying history.
69
Q

What are the advantages of direct marketing

A
  • marketing message is personalised
  • relatively easy to measure response & success
70
Q

What are the disadvantages of direct marketing

A
  • negative image towards junk mail
  • responses can vary significantly
71
Q

Describe ATL advertising

A

advertising to a mass audience through TV adverts, cinema adverts, online adverts

72
Q

What is an advantage of ATL advertising?

A

reaches a large target audience

73
Q

What is a disadvantage of ATL advertising?

A

very expensive

74
Q

Describe BTL advertising

A
  • advertising targeted to niche markets through leaflets, posters, websites, magazines.
  • used to create awareness and communicate information to gain a response.
75
Q

What are the advantages of BTL advertising?

A
  • more a ffordable
  • allows development of business-to-customer relationships
  • easier to track budgets
76
Q

What are the disadvantages of BTL advertising?

A
  • training/investment may be needed to learn about the mediums/platforms involved
  • need knowledge of how customer base
    thinks and behaves
77
Q

Describe public relations

A
  • aims to build relationship between business and the public
  • creates a favourable corporate image
  • unpaid communication about an organisation results in promotion from mass media
78
Q

What are the advantages of public relations?

A
  • consumers trust messages from an objective source - builds influence.
  • quality products can be picked up by news outlets/larger markets
  • cost e ffective
79
Q

What are the disadvantages of public relations?

A
  • no direct control over what is being said about brand
  • no guaranteed success
  • dif ficult to measure eff ectiveness
80
Q

Describe sponsorships

A
  • a business will sponsor an event, team or individual in order to build brand awareness.
  • a secondary objective might be to emphasise social or ethical issues.
81
Q

Describe sales promotion

A

a marketing activity that is designed to increase sales, encourage customer loyalty, or generate brand awareness

82
Q

Describe BOGOF (buy one get one free)

A

used to encourage customers to go into the shop or buy an item

83
Q

What are the advantages of BOGOF?

A
  • very popular
  • encourages trial and use of products
  • boosts sales, therefore sales revenue increases
84
Q

What are the disadvantages of BOGOF?

A
  • loss of profit - there is an increase in costs which is not balanced by increase in sales
  • only useful in short-term
85
Q

Describe price discounts

A

normal RRP (recommended retail price) of the product/service has been reduced
- good way to clear out old/out-of-date stock

86
Q

What are the disadvantages of price discounts?

A
  • may be considered a cheap option
  • too many discounts may make customers suspicious
87
Q

Describe money off coupons

A
  • coupons can be used to capture new customers and add incentive
  • coupons can be used to encourage impulse spending
88
Q

What are the advantages of money off coupons?

A
  • help customers feel they are getting value for money
  • available from magazines, websites, loyalty cards and the back of packaging
89
Q

What are the disadvantages of money off coupons?

A
  • reduced profits
  • customers may wait for coupons before
    purchasing
90
Q

Describe samples/giveaways

A

business’ may send out or give customers free samples to give them an idea of what they are purchasing

91
Q

What are the advantages of samples/giveaways

A
  • ideal for new product launches
  • works well with certain products (eg. food, shampoo, skincare, makeup)
  • encourages word-of-mouth
92
Q

What are the disadvantages of samples/giveaways?

A
  • not all customers want to try samples when shopping
  • can be expensive to give away products for free
93
Q

Describe special events

A
  • events that encourage customers to try a product
  • events can include; shows, fetes, fairs, business events (eg. special wine tastings)
94
Q

What are the advantages of special events?

A
  • rewards loyal customers
  • ideal for smaller businesses
95
Q

What are the disadvantages of special events?

A
  • can be expensive
  • hard to measure the value of the market
96
Q

Describe point of sale

A

usually a display to draw customer attention and trigger an ‘impulse’ purchase

97
Q

What are the advantages of point of sale?

A
  • ideal way to promote new products
  • works best with products that have a holiday tie (eg. easter eggs)
  • can add extra punch with a discount
98
Q

What are the disadvantages of point of sale?

A
  • only successful if meets customer needs
  • needs to be designed and for sale in time for event/holiday
  • displays may be in poor locations (eg. next to a broken till)
99
Q

Define branding

A

characteristics name or symbol that distinguishes one product from another supplier

100
Q

Define manufacturer / corporate branding

A
  • aims to communicate and develop relationships between business and consumer
  • uses images and slogans to establish brand
101
Q

What are the advantages of manufacturer/corporate branding

A
  • spreads cost of marketing across all individual brands
  • awareness of the company can be worldwide
102
Q

What are the disadvantages of manufacturer/corporate branding?

A
  • takes a long time to build solid brand image
  • any unfavourable incidents (eg. Product recall) - whole brand suffers
  • too much advertising can cause indifference towards the brand
103
Q

Describe product branding

A
  • aims to show the customer the features and benefits of a product that differentiate it from other products

eg. colour: mini eggs = yellow, KitKat = red

104
Q

What are the advantages of product branding?

A
  • branded products can command a higher price than non-branded
  • businesses therefore can expect higher profits from branded cash cows
  • good branding differentiates and creates customer loyalty
105
Q

What are the disadvantages of product branding?

A
  • product branding may require large investment
  • product branding may take many years to build up
  • limited flexibility when the product tries to develop new lines in the range beyond what they are known for
106
Q

Describe own brand products

A
  • products that are made by manufacturer on behalf of supermarket
    Tesco: Value , Sainsbury’s: Basics
107
Q

What are the advantages of own brand products?

A
  • boosts customer loyalty to the supermarket
  • competes with manufacturers brands
  • fills gaps left by competition
108
Q

What are the disadvantages of own-brand products?

A
  • store brands can be made by numerous companies under supermarkets name
    • Ketchup is good
    • Cornflakes may taste like cardboard
109
Q

Describe the value of branding

A
  • a strong brand can add value to a product (both business and consumer) - eg. Kudos
  • the brand gains value that helps if it gets sold
  • brings loyalty
110
Q

Define brandnomers

A

a brand that has become so dominant, all products are referred to using its name

111
Q

What does branding do to PED?

A

branding reduces PED

112
Q

Describe direct selling

A
  • manufacturer sells directly
  • no third-party involvement
  • commonly sold online
    ○ Examples: Moonpig, Shein, Small businesses
113
Q

What are the advantages of direct selling?

A
  • all money goes to business
  • business has full flexibility and control
114
Q

What are the disadvantages of direct selling?

A
  • lower total sales volume as customers don’t usually buy in bulk - more wholesalers and retailers.
  • manufacturer has to manage increased distribution costs per sale
115
Q

Describe retailing

A
  • manufacturer produces products and sell to a retailer in bulk.
  • aims to expand where customers purchase to range of locations.
  • helps manufacturer sell more - retailers have wider reach and higher footfall.
    - Examples: Samsung, Nike, H&M
116
Q

What are the advantages of retailing?

A
  • helps reach wider range of consumers
  • distribution costs reduced
  • increased convenience
117
Q

What are the disadvantages of retailing?

A
  • retailers only stock products if they see potential profit, they will pay less than a consumer would.
  • not profitable per unit for business
118
Q

Describe wholesaling

A
  • wholesalers buy products from manufacturers in bulk
  • aim of selling them on to various retailers - often independent sellers.
    • Examples: multipacks of coca cola sold in one-stop shops
119
Q

What are the advantages of wholesaling?

A
  • allows manufacturers to guarantee high sales volume due to the amount of products a typical wholesaler would purchase.
  • no need to invest as heavily in marketing as they still benefit from exposure.
  • reduced distribution costs
120
Q

What are the disadvantages of wholesaling?

A
  • profit margins squeezed tighter
  • manufacturer loses control
121
Q

Define retailer

A

a business that sells goods directly to a consumer through a ‘bricks and mortar’ shop

122
Q

Clicks vs Bricks and Mortar

A

Clicks: online presence
Bricks and mortar: physical presence

123
Q

Describe direct-to-consumer distribution

A
  • owner of retail shop may have bought goods from a wholesaler or manufacturer to sell onto consumer
  • retailer will mark-up price - allows them to make a profit
124
Q

When is direct-to-consumer distribution useful

A
  • when customer needs help with a purchase or wants to see products up close - material, quality or size of a dress may be hard to determine online
  • some customers may want to try products on before purchasing
125
Q

Describe independent retailers

A
  • not part of a chain (eg. Tesco)
  • started by business owners - small retailers
  • sell to more niche markets - more unique so higher price can be charged
  • may have to compete on non-price factors such as customer service
126
Q

What are the advantages of independent retailers?

A
  • can be an enjoyable experience to go shopping
  • retailers can make more of a profit
  • good customer service
  • provides job opportunities
  • online shopping avaliable 24/7
  • instant satisfaction - customers can have product as soon as it is bought
127
Q

What are the disadvantages of independent retailers

A
  • online shopping riskier - size, quality, material
  • customers may find cheaper alternatives
  • unsold stock
128
Q

Describe integrated marketing mix

A

provides a seamless experience for the customers and attempts to co-ordinate and combine all the 7Ps

AQA A-Level Business (7 decks)

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