Theme 1 Marketing and People Flashcards
What does the term market refer to?
Buyers and sellers that trade a particular type of product in a particular place
What are the types of markets?
Mass Market
Niche Market
Who is mass market aimed to?
Large group
Who is niche market aimed to?
Specific groups
What is market size?
Total value of sales in a market over a certain period of time
What is market share?
Proportion of the total market the business holds
What is branding?
Creates a clear and obvious logo, name or statement that customers can instantly recognise
Where is brand distinction important?
Mass market
Definition of a dynamic market?
Change and evolve rapidly
How do markets change?
Consumer preference
Innovation
Way customers want to shop (online)
Competitors
Change in legislation
What is online retailing?
Selling products via the internet
Benefits of online retailing?
Costs are lowered as does not need physical shop
Convenient - customers can order at any time
Customers can easily compare prices
Drawbacks of online retailing?
More competition
Some customers like to see product before they buy
Business need to make sure customers personal details are kept private
Fraudulent transactions
Cyber criminals
What is direct competition?
When two or more businesses sell similar products that appeal to the same group of customers
What is indirect competition?
When two or more businesses sell products that are different, but they are competing for the same customers
What is a risk?
Something going wrong or gaining a different outcome
What are uncertainties?
Unexpected events
What are the types of orientations?
Product Orientation
Market Orientation
What is product orientation?
Making production and marketing decisions focuses heavily on the design, quality or performance of the products
What is market orientation?
When a business focuses most heavily on selling products that match customer prefences
What are the types of market researches?
Quantitative
Qualitative
Primary
Secondary
What is quantitative market research?
Numerical statistics
What is primary market research?
Where a business gathers new data
Methods of primary research?
Questionnaires
Surveys
Observations
Interviews
Focus Groups
Sampling
Advantages of primary research?
Specific
Great for niche markets
Exclusive (competitors cannot benefit)
Disadvantage of primary research?
Labour-intensive
Expensive
Slow
What is secondary research?
Data that is already available and made by another person
Methods of secondary research?
Government Publications
Internet Sources
Trade magazines
Market Reports
Advantages of secondary research?
Easy
Fast
Cheap
Disadvantage of market research?
Errors
Out of date
Research collected for different reason may be unsuitable
What can businesses use now for better market research?
Technology
Advantages of using technology for market research?
Easy
Cheap
Quick
Examples of ICT that firms can use for market research?
Websites
Social Networking
Database
What is social networking?
Use of internet based platforms to make connections with people
Advantages of social networking?
Track current trends
Cheap and Quick
Connect with customers
Disadvantages of social networking?
Not all customers use the same social networks
What does segmentation mean?
Dividing a market into group of buyers
Four ways a market can be segmented?
Demographic
Geographic
Income
Behavioural
Examples of demographic segments?
Age
Gender
Socio - economic class
What can behavioural segments based on?
Lifestyle
Hobby
Interests
What is market mapping?
Compares two features of products or brands
(price and quality)
What does market mapping show?
Spot a gap in the market
Show demand for a product
Biased - based on opinions
What does competitive advantage mean?
Condition which allows a firm to generate more sales or be more profitable than its rivals
Examples of competitive advantage?
Lower costs
Product innovation
Advertising and Marketing
Product Differentiation (USP)
Reliability and Quality
Good Customer Service
Convenience - quick and easy buying experience
How to calculate added value?
Price product is sold for - Cost of making product
Definition of demand?
Quantity of a product that consumers want and are able to buy at a given price at a particular price
Definition of supply?
Quantity of a product that suppliers are willing and able to supply to a market at a given price, at a particular time
Which way does the supply and demand curve slope?
Demand curve - slopes downwards
Supply curve - slopes upwards
What is equilibrium price?
When the amount demanded matches the amount supplied
When does a surplus occur?
Price increases
What happens to a supply and demand diagram when a surplus occurs?
Quantity demanded would be less then the quantity supplied, means excess supply
When does a shortage occur?
When price decreases
What happens to a supply and demand diagram when a shortage occurs?
Would mean more demand then supply and there would be a excess demand
What factors influence demand?
Substitutes
Complementary Products
Consumer Income
Consumer Preferences
Advertising and Branding
Demographics
Seasonal Changes
External Shocks
Definition of substitutes?
Demand for a particular brand or product type can be affected by a price change of a substitute
Definition of complementary products?
Products that are used together
Factors that affect supply?
Cost of production
Indirect Taxes - taxes on goods and services (VAT)
Subsidies - money from government
New Technology
Weather Conditions
External Shocks
If there is a rise in demand which way does the demand curve shift to?
Right
If there is a fall in demand which way does the demand curve shift to?
Left
If there is a rise in supply which way does the supply curve shift to?
Right
If there is a fall in supply which way does the supply curve shift to?
Left
Definition of price elasticity of demand (PED)?
How much the price change affects the demand
Formula for PED?
% change in quantity demanded
__________________________________
% change in price
What does it mean if the price elasticity is greater than 1?
Product is price elastic
What does it mean if the price elasticity is less than 1?
Product is price inelastic
For price elastic products is change in demand or change in price greater?
Change in demand
For price inelastic products is change in demand or change in price greater?
Change in price
Are necessity products price elastic or price inelastic?
Price inelastic
How does the demand curve look on a product that is price elastic?
Shallow demand curve
How does the demand curve look on a product that is price inelastic?
Steep demand curve
What does price elasticity of demand affect?
Sales Revenue
Formula for sales revenue?
selling price x sales volume
What happens to sales revenue if product is price elastic?
Price increases means sales revenue goes down
What happens to sales revenue if product is price inelastic?
A rise in price will make sales revenue go up
Formula for Income elasticity of demand?
% change in quantity demanded
__________________________________
% change in income
Are luxury products price elastic or price inelastic?
Price elastic
What are the 4P in the Marketing Mix?
Product
Promotion
Price
Place
What is involved in the Design Mix?
Function
Aesthetics
Cost
Aim of promotion?
Designed to inform consumers about a product or persuade them to buy it
Promotion methods?
Advertising (online)
Direct Marketing - materials sent in the post
Direct Selling
Public Relations - TV interviews/Events
What does branding create?
Creates a clear logo, name or statement
What are three types of branding?
Manufacturer and Corporate Branding
Product Branding
Own Branding
What is Corporate Branding?
How a business presents itself
What is Product Branding?
Branding for a specific individual product that a corporate brand makes
What is Own Branding?
Refers largely to brands that are in house to a supermarket or retailer
Cheaper and known to be lower quality
What is rebranding?
A marketing strategy that can involve a change to to the design, promotion, pricing or distribution of an existing brand
Why do businesses decide to rebrand?
Aim at a different market
Create a new identity
What are benefits of strong branding?
Add value
Less price elastic
Customers view the product as more desirable - repeated purchases
Harder for competitors to enter the market
What are the ways businesses can build a brand?
Base the product around the unique selling point
Advertising- promote and maintain consumer awareness
Sponsorship
How can you promote a business online?
Social media/Virtual Marketing
Advantages of using social media for promotion?
Low cost
Disadvantage of social media for promotion?
Loss of control as negative images or messages about a brand can be spread and damage the businesses reputations Take a long time and great expense to recover.
Advantages of emotional branding?
Engage consumers and more likely to buy as it is personal to them
What can affect pricing decisions?
A strong USP
Level of Competition
Manufacturing cost
Customers
What are the pricing strategies?
Price Skimming
Penetration Pricing
Cost-Plus Pricing
Predatory Pricing
Competitive Pricing
Psychological Pricing
What is price skimming?
New product is sold at a high price and overtime decreases
Advantages of price skimming?
Long term strategy to keep brands more exclusive
Disadvantage of price skimming?
Customers who brought the product when it released may become annoyed when they see the price drop
What is penetration pricing?
Launching a product at a low price to attract customers and gain market share
Disadvantage of penetration pricing?
Customers may except low price to continue, difficult to raise without losing customers
Advantages of price penetration?
Target more budget conscious market segment
Extension Strategy
What is cost-plus pricing?
When a firm adds a percentage mark-up to the cost of making or buying a single product
What is predatory pricing?
Lowering prices to force another business out of the market
What is competitive pricing?
Businesses monitors their competitors prices to make sure that their own price are set at an equal or lower level
What is psychological pricing?
Bases price on customers expectations
Change in social trends that can affect pricing strategies?
Customers are increasingly using online retailers
Use of price comparison sites is increasing
What is a channel of distribution?
The route a product takes from the manufacturer or producer to the consumer
What are retailers?
Shops who sell to consumers
What are wholesalers?
Buy goods from manufactures in bulk and sell them in smaller quantities to retailers called “breaking bulk”
Who are agents?
Sell products to customers on behalf of businesses
What are the different channels of distribution?
Direct Selling (two stage channel)
Indirect Selling (three stage channel)
Indirect Selling (four stage channel)
What is Direct Selling?
Manufacturer to consumer
Internet and door to door selling
What is Indirect Selling (three stage channel)?
Manufacture to Retailer to Consumer
Retailers are normally shops
What is Indirect Selling (four stage channel)?
Manufacture to Wholesaler to Retailer to Consumer
May be more costly for consumers
What is mult-channel distribution?
When businesses sell through more than one method
e.g. online or in-store
What is online distribution?
Is the streaming or downloading of media content via the internet
What does the product life cycle show?
Sales of the product over time
Stages in the product life cycle?
Research and Development
Introduction
Growth
Maturity
Decline
What is a extension strategy?
Used to improve the sales of products that are starting to decline
What do extension strategies involve?
Product Development - improving or redesigning the product
What is a product line?
Consists of related products with similar characteristics, uses or target customers
What is a product portfolio?
Combination of all the product lines that a business produces
What does Boston Matrix show?
Compares market growth with market share
What are the 4 categories on Boston Matrix ?
Stars
Question Marks (problem child)
Cash Cows
Dogs
What does question mark (problem child) mean regarding Boston Matrix?
Low market share - High market share
All new products in this section
Are not profitable yet
What does cash cows meaning regarding Boston Matrix?
High market share -Low market growth
In the maturity phase
What does star mean regarding Boston Matrix?
High market share - High market growth
More profitable
What does dog mean regarding Boston Matrix?
Low market share - Low market growth
What does mass marketing strategy need to appeal to?
The whole market
Examples of mass marketing strategies?
Advertising Campaigns
Sponsorships
Promotional Activities
Customer Loyalty Cards
Saver Schemes
What does niche marketing strategy need to appeal to?
Specific market segments
B2B and B2C stand for?
Business to business
Business to consumer
What does it mean staff are an asset to a business?
Means that they are something a business has that is valuable
Types of contracts staff have?
Full time
Part Time
Zero Hour Contract
Permanent or Temporary Contract
Shift Work
Home Working
Flexible Hours
Outsourcing
Meaning of full time and part time contract?
Full time work at least 35 hours a week
Part time work less then full time
Meaning of zero hour contract?
No guaranteed hours
Staff work when they are needed
Staff do not have to accept
Little financial security
Meaning of permanent and temporary contract?
Permanent contract has no end date while temporary contract does
Permanent contract provide more financial security
Meaning of shift work?
Used when a job needs filling for more hours in a day than can be completed by a single worker
Allows staff to have flexibility
Meaning of home working contract?
Employees can work from home some or all days of the week
Save travel cost
Cannot be monitored
Can become distracted
Meaning of flexible hour contract?
Workers complete a set number of daily/weekly/monthly hours at times that suit them
Improve employee motivation
Harder to set up meetings
Meaning of outsourcing?
Outsource some tasks to external businesses
Do not need to invest money in training staff
Definition of multi-skilled workforce?
Business can employ fewer workers means that a business can employ fewer workers
What does individual bargaining for pay mean?
Employers can decide to pay an employee what they think he or she is worth to the firm
What is collective bargaining?
When a group of employees is represented by workforce representatives - these negotiate with the employers on issue such as pay and working conditions
Example of workforce representatives?
Trade unions
Recruitment stage process?
Identify vacancy
Write job description and job specification
Advertise job
Process applications
Shortlist most suitable candidates
Assess most suitable candidates
Appoint most suitable candidates
Types of selection processes?
Interviews
Assessment days
In-tray exercise
