Section Six - Marketing Flashcards
Market
Any situation in which the buyer and seller interact in order to exchange goods or services
Elements of a Market
Buyer
Seller
Product
Price
Types of Market
Consumer market
Commodity market
Money market
Capital market
Foreign exchange market
Labour market
Consumer market
Provides goods that satisfy our basic needs
Commodity market
Deals with extremely large quantities of agricultural produce and raw materials
Money market
Financial institutions engaged in short term lending
Capital market
Financial institutions engaged in long-term lending
Marketing
The management process responsible for identifying, anticipating, and satisfying consumer’s requirements profitability
Marketing aims
Identify consumer wants and needs
Raise consumer awareness
Customer loyalty
Increase sales
Marketing strategy process
- Understanding customer
- Analysing SWOT
- Market competition
- Marketing network
- Planning marketing mix
- Design and execution
- Review and revise
Integrated Marketing
A unified holistic approach to communication in marketing combining all aspects of marketing
Marketing Activities
Market research
Pricing
Packaging
Branding
Sales promotion
Advertising
Distribution
Market Research
The process of finding out about a particular market problem or situation by gathering, analyzing and interpreting information in a systematic way
Market Segmentation
The process of identifying common characteristics among consumers in the market. The market is then segmented or divided into groups of buyers based on needs, characteristics, or behavior
Market Targeting
This involves evaluating the market segments’ attractiveness and selecting which segment to enter.
Market Positioning
This involves developing the marketing strategy involving the use of the marketing mix to help the product get noticed by the consumer
4 P’s of Marketing
Promotion
Product
Price
Place
Product
The good or service that is needed by the targeted group or the product, idea, or service that the firm wishes the target group to buy
Price
The monetary value customers are willing to pay for the item. The firm must be willing to sell at that price in order to make a profit
Promotion
The act of attracting the attention and interest of the target market to the product or service offered for sale.
Place
The system of distribution to get the commodity to the consumer
Factors affecting pricing
Cost of producing item
Level of demand
Degree of competition
Pricing Strategies
Cost-plus pricing
Penetration pricing
Market-skimming pricing
Psychological pricing
Differential pricing
Dumping
Going rate pricing
Competition based pricing
Cost-plus Pricing
This involves taking the unit cost, adding overheads, and a profit margin to arrive at the selling price.
Penetration Pricing
A new firm entering the market may price its product below that of its competitors. The aims are to gain entry into the market and increase market share.
Market-skimming Pricing
This involves charging a relatively high, introductory price for a product in order to secure a large profit margin.
Psychological Pricing
Firms keep prices just below certain levels so that they appear cheaper to the customer.
Differential Pricing
This is where the same product is sold at different prices to different market segment
Dumping
Products may be sold below cost or at a loss just to obtain some income from them.
Going rate pricing
This involves setting a price equal to the prevailing market price for similar or identical products
Competition based pricing
Setting prices at or below the price of rival products
Advertising
An advertisement is a message that is used to provide information on the availability of a product or to encourage or convince potential buyers.
Function of Advertising
- To introduce new products on the market
- To create awareness of promotional activities
- To build loyalty towards a brand
Types of Advertising
Informative
Persuasive
Competitive
Defensive
Reminder
Persuasive advertising
This type tries to entice the consumer to purchase the product by using emotional and psychological appeals
Competitive advertising
This type aims to gain market share by telling the good points about a product and comparing these with the competitors.
Defensive advertising
This form of advertising reacts to competitive advertising by a competitor.
Reminder marketing
Used in the maturity stage of the product life cycle, where the product is well known, and the customer is reminded of its availability. Used to maintain presence in the market
Merchandising
The act of displaying products that are for sale in a creative way that entices customers to purchase more items or products.
