Topic 3 Decision Making To Improve Marketing Performance Flashcards
What is marketing?
The process of identifying, anticipating and satisfying customer needs profitably
Why set objectives?
- to help coordinate firm activity
- motivational target
- increases success probability as decision making is more focused
Internal influences on marketing objectives and decisions
- new corporate objectives
- new innovative products
- new objectives in other departments
External influences on marketing objectives and decisions
- change in consumer trends
- changing economic pressure/ economic climate
- changing competitive structure
- changing natural environment
Factors affecting demand in a market
- price
- income
- competition
- firms own marketing activities
- external environment
Highest volume, value and share in market =
Highest distribution level = lowers cost of supplies/ economies of scale = higher revenues = higher profit margin
Evaluate market research
- is it reliable?
- are all information up to date?
- cost?
- time consuming?
- legal and ethical constraints?
Purposes of market research
- more detailed understanding of customer needs
- reduce risk of product and business failure
Market mapping purpose
Model shows key features that characterises consumers within a market to identify gaps in the market
PED/ Price Elasticity of Demand formula
Percentage change in quantity demanded / percentage change in price
Price inelastic
- between 0 and -1
- change in price is higher than change in demand
- price higher
Price elastic
- greater than -1
- demand is higher than price change
- lower price
YED/ Income Elasticity of Demand formula
% change quantity demand / % change in income
Income elastic
- demand for good is higher than income change
- luxury/ superior good
- positive
Normal good in YED
Positive between 0.1 and 1.5
