Theme 1: Marketing and People Flashcards
1
Q
Mass Market
A
the largest part of the market where products are produced in large quantities and customers have general wants and needs.
2
Q
Niche market
A
A small and specialised segment of a larger market where customers have more specific wants and needs and products are produced in smaller quantities.
3
Q
Mass marketing
A
To sell products to as many people as possible
4
Q
Market Size formulae
A
Sales Volume: Units sold
OR
Sales revenue: Units sold x Price
5
Q
Market share
A
Business sales/ Total market sales x 100
6
Q
Dynamic market
A
A market subject to continual, rapid and fundamental change over a short time period.
7
Q
Market growth formulae
A
Increase in sales/ original sales x 100
8
Q
Innovation
A
Being crucial in a dynamic market, a new idea or invention launched onto the market, increasing competetiveness and marker share.
9
Q
Brand
A
A unique design/sign/symbol/words/logo that distinguishes it from its competitors.
10
Q
Brand Personality
A
A set of human characteristics associated with the brand name.
11
Q
Difference between risk and uncertainty
A
Risk can be quantified but uncertainty cannot.
12
Q
Market research
A
Gathering, presenting, and analysing information about products and customers.
13
Q
Product Orientation
A
Develops products based on what it is good at doing, with a focus on quality and design performance.
14
Q
Market Orientation
A
The business finds out the needs and wants of the customers and meets customer requirements.
15
Q
Primary market research
A
Collection of first-hand data. Surveys, focus groups, interviews
16
Q
Secondary market research
A
Collection of second-hand data. Published market research reports, Online (Statista), Government statistics (O.N.S), Trade publications.
17
Q
Quantitative research
A
Numerical data. Easier and cheaper than qualitative research, through methods such as brief questionnaires or visits to potential competitors
18
Q
Qualitative research
A
Non-numerical data. Collected to find out motivations behind consumer behaviour and their opinions.
19
Q
Random sampling
A
An individual is completely chosen by chance from a population
20
Q
Quota Sampling
A
Divide population into groups then select representative respondents
21
Q
Stratified Sampling
A
Quota then random
22
Q
Test marketing
A
Selling a new product to a small section of the market to assess customer reaction
23
Q
STPM process
A
Segmentation,
Targetting,
Positioning
Marketing MIx
24
Q
Market segmentation
A
Dividing a market into specific parts that reflect different customer wants and needs
25
5 ways of market segmentation
Demographics
Income
Behavioural
Geographical
Lifestyle
26
Define Market Positioning and 2 ways to achieve it.
An effort to influence consumer perception of a brand or product, relative to the perception of that of competitors. It is achieved through product differentiation and adding value.
27
Market mapping
Illustrates the range of positions a product can take in a market, based on 2 dimensions that are important to customers (like price v quality). Can identify gaps in the market or help market repositioning as part of marketing strategy, and therefore useful for both start-up and established businesses.
28
Competitive advantage/ edge and how to achieve it.
A feature of a business or its products that allows it to have an edge over the competition, using differentiation. According to Porter's generic strategy, cost or differentiation are sources of competitive advantage.
29
Differentiation and 3 benefits
Making a product stand out from competitors.
Benefits:
Source of competitive advantage
Brand loyalty
Add value to charge premium prices.
30
Added value
Difference between the price customer pays and cost of inputs.
31
Demand
The amount that customers are willing and able to buy at a given price over a period of time.
32
7 factors affecting demand
Price of substitutes and complementary goods
Consumer incomes
Fashion, tastes and preferences
Seasonality
Advertising and branding
Demographics
External shocks
33
Supply
The amount that producers are willing and able to produce at a given price over a period of time
34
Factors affecting supply
New technology
Indirect taxes
Government subsidies
Cost of production
External shocks
35
Types of market disequilibrium
Excess demand (Price < market clearing price)
Excess Supply (Price > market clearing price)
36
The formula of P.E.D
The responsiveness of demand to a change in price.
% Change in Q.D./ % Change in price
37
Types of coefficient of PED and what they mean
PED >1= price elastic
PED=1= unitary elastic
PED<1= price inelastic
38
Factors affecting P.E.D
Availability of substitutes
Necessity
Habit
Brand Strength
Time
Cost of switching
Proportion of income spent on the product
39
Y.E.D (Income elasticity of demand)
Measures the responsiveness of demand to changes in consumer income. % change in quantity demanded/%change in income
40
factors affecting Y.E.D
Luxury or necessity (Luxury=income inelastic)
Inferior or normal good (Inferior=negative YED= rise in income means fall in demand)
Changes in income
41
What decides if the sign of YED is negative or positive
Normal good= Positive YED
(Rise in income=rise in demand)
Inferior good= Negative YED
(Rise in income=fall in demand)
42
Why the sign in PED doesn't matter but sign in YED matters
PED: IGNORE THE NEGATIVE SIGNS because the relationship is largely negative between price and demand
SIGN in YED indicates whether the type of good is normal or inferior.
43
What decides the VALUE of YED
Luxury or Necessity.
Necessity= income inelastic (YED<1)
Luxury=income elastic (YED>1)
44
Sign and Numerical value of PED and YED means?
Sign= positive or negative correlation
Numerical value= extent of change/ elasticity
45
Marketing
The process of identifying, predicting and satisfying customer needs
46
Design Mix
Aesthetics, Function, Costs
47
Extended Marketing Mix (7Ps)
Price
Product
Place
Promotion
People
Process
Physical environment
48
4 ways to adapt to social trends
Sustainable product design (concerns over resource depletion)
Waste minimisation
Re-use and recycling
Ethical sourcing
49
Define Promotional methods.
The way a business creates awareness for its product. To inform (awareness) and persuade (demand).
50
Above-the-line promotion (mass audience)
Advertising
Direct marketing (no middleman)
51
Below-the-line promotion
PR
Merchandising
sales promotions
52
Advertising
Paid-for communication aimed at spreading marketing message.
53
Sales promotion
A tactical strategy used at POINT OF SALE that uses material incentives to persuade customers to purchase.
54
Personal Selling
Personal selling is where businesses use people to sell the product after meeting face-to-face with the customer. The sellers promote the product through their attitude, appearance and specialist knowledge.
55
Brand
A unique design/sign/symbol/words/logo that differentiates it from its competitors.
56
Branding
Creating an image or name that gives a product a positive and recognisable identity, helping with promotion and increasing sales.
57
Advantage of Strong Branding
Higher brand loyalty= Less price elastic- higher prices can be charged= higher revenue
58
Brand extension
Adding new product category under the brand name.
59
4 Ways to build a brand
Exploit USP/ Differentiation
Advertising (inform and persuade)
Sponsorship (awareness)
Social media
60
3 Ways that branding and promotion reflect social trends
Viral marketing (word-of-mouth on internet)
Social media
Emotional branding
61
6 pricing strategies
Cost-plus pricing
Price skimming
Price penetration
predatory pricing
Competetive pricing
Psychological pricing
62
Price skimming
Setting an initial high price, to take advantage of those wanting to be the first ones to purchase.
63
Price penetration
Low initial price and accept short-term loss to build market share and loyalty before switching to a more profitable price.
64
Predatory pricing
Setting low prices for a short period of time to force new and weak competitors out of the market
65
Competitive pricing
Setting prices like competitors and what the market will bear, following the price leader
66
5 Factors affecting pricing strategy
Amount of USPs/ Degree of differentiation
PED
Brand strength
Stage in Product life cycle
Costs and need to make a profit
67
2 Social trends that affect pricing
E-commerce (pressure to keep low prices)
Price comparison sites (easier to find cheapest)
68
Distribution
the way the product reaches the end consumer in the right place at the right time in the right quantities.
69
Direct distribution
Producers and consumers deal directly with each other without the involvement of an intermediary (like a wholesaler, retailer, or distributor)
70
Indirect distribution
Involves intermediaries between the producer and consumer.
71
Term for using more than 1 channel of distribution
Multi-channel distribution
72
How businesses adapt distribution to social trends
E-commerce= multi-channel distribution (brick-and-mortar and online)
Online banking services
Subscription plans for traditionally physical products like films
73
Product life cycle
development, introduction, growth, maturity and decline
74
Marketing Strategy
Methods used to achieve marketing objectives
75
Extension Strategy
Aimed at delaying the decline stage of a product's sales in the medium-to-long term.
Lowering price
Redeveloping product
New promotional method
New distribution channels
Market repositioning
76
Product portfolio
The list of products sold by a business.
77
Boston Matrix
A method used to analyse the product portfolio of a business
by placing products according to market growth and market share
78
Marketing strategy in niche markets?
FOCUS on differentiation by quality or customer service
79
Marketing strategy in mass markets
Ensure the price is as competitive as possible and reaches all potential customers.
80
3 ways to develop customer loyalty
Quality
Physical environment
Customer service
Loyalty schemes
Branding
81
Staff as an asset
Treating employees as an important resource and source of competitive advantage
82
Staff as a cost
Treat employees as resources to be exploited.
83
Flexible workforce
Employees have choices over how and when they work
84
Multi-skilling
Staff are trained to have more than one skill set and carry out a variety of tasks, enabling job rotation
85
Part-time staff
work fewer hours than a full-time emoloyee
86
Temporary staff
Work for a specific period of time like peak periods
87
Flexible hours and flexible working
e.g., work from home
88
Outsourcing
Delegating business processes to an external provider, who then owns, manages and administers the selected process to an agreed standard.
89
Difference between dismissal and redunduncy
Dismissal: because of breach contract or other unacceptable behaviour or performance
Redundancy: An employee loses a job because the job is no longer required by the business. Requires redundancy payments.
90
2 types of consultations in an employer-employee relationship
Individual approach
Collective bargaining (trade unions etc.)
91
Internal recruitment
FIll a vacancy from within the existing workforce
92
External recruitment
Filling a vacancy from outside the business. Job centres, job advertisements, headhunting, recruitment agencies
93
On-the-job training vs Off-the-job training.
On-the-job: Where employees learn skills whilst remaining in the workplace doing their job.
Off-the-job: where employees learn skills away from the workplace.
94
Specific training that new employees receive when joining a business?
Induction training.
95
Job rotation
the trainee is given several jobs to gain a wide range of experiences.
96
Coaching
A more intensive method of training that involves a close working relationship between an experienced employee and the trainee
97
Organisation sturcture
Shows who is answerable to whom in an organisation. It can also show vertical and horizontal communication links.
98
Hierarchy
Structure and number of layers of management within an organisation
99
Chain of command
Describes the line of authority within a business. Long vs Short.
100
Span of control
Number of subordinates a manager is directly responsible for. Wide vs Narrow.
101
Centralised vs decentralised organisational structure
Centralised: decision-making is kept at the top of the hierarchy
Decentralised: decision-making spread out to more junior managers in the hierarchy, and branches like retail outlets can make their own decisions.
102
Term for where responsibility for carrying out a task or role is passed onto someone else in the business.
Delegation
103
Tall organisational structure
One with many layers and a narrow span of control for each manager
104
Flat organisational structure
One with few layers and a wider span of control for each manager
105
3 Benefits of tall organisational structure
Closer supervision
More promotional opportunities
Improved Direct communication between managers and subordinates due to narrow span of control
106
3 drawbacks of tall structure
Less delegation=less empowerment
More layers of staff=more costs
Slower vertical communication
107
3 Benefits of flat structure
Greater delegation
Fewer layers of staff=saved costs
Faster vertical communication
108
3 drawbacks of flat structure
Fewer promotional opportunities
Less supervision=mistakes
109
Matrix structure
Employees work across teams and projects as well as within their own department
110
Benefits of Matrix structure
Improve communication between departments
Sharing of good practices between departments
Employees can use their skills in a range of context
Greater motivation in teams
111
Drawbacks of Matrix Structure
Divided loyalties as employees have two line managers (department and also team leader)
Team members neglecting functional responsibilities
Difficulty to co-ordinate
112
6 benefits of motivation to business
Increased productivity
Lower turnover
Lower absenteeism
Better customer service
Better quality
Greater employee loyalty
113
4 motivation theories
Taylor (scientific management)
Mayo (Human relations theory)
Maslow (hierarchy of needs)
Herzberg (2-factor theory)
114
3 key points of Taylor's theory
Motivated by pay
Piece rate increases productivity
work should be broken down into smaller tasks that can be specialised
115
4 key points from Mayo's theory
Workers are motivated by having their social needs met at work
More freedom and two-way communication
Greater attention from managers
Working in teams
116
Maslow's hierarchy of needs
Physiological
Safety
Social
Esteem
Self-actualisation (TOP)
117
What are the factors from Herzberg's theory
Hygiene factors (prevent unhappiness but does not motivate)
such as pay, working conditions
Motivators
such as increased responsibility, recognition, achievement
118
5 financial incentives to improve employee performance
Piecework
Commission
Bonus
Profit sharing
Performance-related pay
119
8 non-financial incentives to improve employee performance
Delegation
Consultation
Empowerment
Team working
Flexible working (multi-skilling, part-time, temporary working, and flexible hours)
Job enrichment (more challenging and interesting tasks)
Job enlargement (more tasks of a similar level)
Job rotation (between roles)
120
Managers vs Leaders
Managers: Allocate resources and make decisions to meet business objectives.
Leaders: Inspiring followers, building relationships, creating a vision and setting goals.
121
Autocratic leadership
Autocratic leadership assumes that decision-making is best kept with managers, with one-way communication and little consultation with subordinates.
Suits businesses with high staff turnover and fast-paced businesses.
122
Democratic leadership
Employees are more involved in de-centralised decision-making. It involves consultation and delegation between managers and subordinates.
123
Paternalistic leadership
Softer version of autocratic leadership.
Parent/child relationship, but the leader decides what is best for employees with little delegation.
Linking to Mayo's human relations theory.
124
Laissez-faire leadership
The leader has next to zero input into day-to-day decision-making. Great delegation and freedom.
125
Entrepreneur and 3 roles.
A person who takes risks and combines factors of production (land, labour and capital) to set up a business.
3 Roles:
* Setting up, running and developing a business,
* innovation within a business (intrapreneurship),
* anticipating risk and uncertainty
126
Intrapreneurship and why is it easier than entrepreneurship?
Entrepreneurial activity (innovation) within a business that takes risks and leads to the creation of new parts or products of the business or even a whole new business. (support makes intrapreneurship easier than entrepreneurship outside of business)
127
2 key financial motives for an entrepreneur
Profit maximisation
Profit satisficing (only enough to have a fairly good standard of living)
128
Business objectives
A short-term goal/target (1) set by the business to help achieve its long-term aim/mission (1)
129
Social enterprise
A business that has objectives which benefit society (1) and its profits are reinvested into the community (1).
130
Corporate strategy vs marketing strategy
overall policies used by a business to achieve the desired long-term aim
whilst the Marketing strategy aims to increase sales
131
2 most common business objectives
Survival and profit maximisation
132
6 other possible business objectives
Sales maximisation
Market Share maximisation
Cost efficiency/cost minimisation
Employee welfare
customer satisfaction
social objectives
133
Unincorporated
The owner is the business, unlimited liability for business actions, and most act as sole traders.
134
Incorporated
the company has a separate legal identity, owners have limited liability, and most operate as private limited companies.
135
Limited liabilities
Liability in a company is confined to the amount invested in the company
136
Unlimited liabilities
The owner's liability for the debts of the business is not confined to the amount invested.
137
3 Pros for a sole trader
Quick and easy to set up with minimal paperwork-- can always be transferred to a limited company once launched
Control over decision-making
Owner can keep profits or reinvest without consultation
138
3 cons for sole trader
Unlimited liability
Limited source of finance
More stress and responsibility-- long-term illness=death of company
139
Define sole trader
An individual who fully owns the business with unlimited liability
Can employ people however their employees cannot own any part of the business.
140
Define partnership
A business which is started and owned by more than one person, and owners have unlimited liability. There will be an agreement on decision-making, how profits are shared; what the partners have to invest etc.
141
Pros of partnership
Minimal paperwork
partners can provide specialist skills
a wider source of finance than a sole trader
142
Private Limited Company
an incorporated business, which is a separate legal entity, run by the family that owns it. shareholders are known to the company and shares are not sold on the stock exchange. Owned by shareholders, and run by a board of directors.
143
3 Pros of Private Limited Company
Limited liability
Wider source of finance than a partnership (shares)
Stability: exist even when shareholders change
144
3 Cons of Private Limited company
Limited source of finance compared to Public limited company (Shares cannot be traded publicly)
Greater administration costs compared to partnership
Public disclosure of company information
145
Public Limited company
Shares can be traded on the stock exchange and normally have a substantial number of shareholders. Subject to a lot more scrutiny compared to most other businesses.
146
Pros and cons of Public limited company
Pro: substantial share capital, limited liability, raises its profile
Cons: high takeover risk, loss of control to shareholders, increased scrutiny of financial performance (public disclosure of info)
147
Franchises
Where a franchisor grants a licence (franchise) to another business (franchisee) to allow it to trade using the business format.
148
Benefits to franchisor
Rapid geographical growth for minimal investment
Can cream-off the "above normal" profits
149
2 Pros for franchisee
Tested and developed business format and brand= easy success
Support and training provided
150
2 cons for franchisee
Costly initial fees like royalties
Restrictions on decision-making due to the business model
151
Lifestyle Business
Profit satisficing (make a living only)
while still allowing owner flexibility to do their own hobbies like travelling
152
Process for conversion of private to public limited company
Stock market flotation
153
Opportunity cost
The cost of making one choice in terms of the next best alternative forgone.
154
Trade-off
Having more of one thing(benefit) means less of another due to scarcity of resources.
155
Trade-off
Having more of one thing(benefit) means less of another due to scarcity of resources.
