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Business > Topic 3 - Decision making to improve marketing performance > Flashcards

Topic 3 - Decision making to improve marketing performance Flashcards

1
Q

The value of setting marketing objectives

A
  • steer direction of the business

- more focused decision making

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2
Q

Examples of marketing objectives

A
  • sales volume and value
  • market size
  • market and sales growth
  • market share
  • brand loyalty
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3
Q

Internal influences on marketing objectives and decisions

A
  • new corporate objectives
  • new innovative products
  • new financial objectives
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4
Q

External objectives on marketing objectives

A
  • changes in fashion and consumer tastes
  • changing competitive pressures
  • changing economic pressures
  • changing natural environment
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5
Q

Primary research

A

Research done by the firm

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6
Q

Secondary research

A

Research done by 3rd party

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7
Q

Qualitative data

A

Opinions

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8
Q

Quantitative data

A

Data

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9
Q

Advantages primary data

A
  • directly focused to research objectives
  • up to date
  • more detailed insights
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10
Q

Drawbacks of primary market research

A
  • time consuming
  • costly
  • risk of bias
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11
Q

Advantages secondary research

A
  • often free and easy to obtain
  • good source of market insights
  • quick to access and use
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12
Q

Drawbacks of secondary market search

A
  • quickly becomes out of date
  • not tailored to specific research needs
  • quite expensive
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13
Q

Advantages of quantitative

A
  • data easy to analyse
  • provides insights into relevant needs
  • can be compares
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14
Q

Drawbacks of quantitative research

A
  • focuses on data rather than explaining
  • doesn’t explain reasons behind numerical trends
  • may lack reliability if same size is small
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15
Q

Benefits of qualitative

A
  • essential to new launches
  • focuses on customer needs, wants and expectations
  • can highlight issues that need addressing
  • test elements of marketing mix
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16
Q

Drawbacks of qualitative research

A
  • expensive to collect and analyse

- sample may not be representative

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17
Q

What is market mapping

A

Plot two characteristics on the axis

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18
Q

Why use market mapping

A
  • allows gaps in the market to be found

- allows effective market positioning

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19
Q

The value of sampling

A
  • cheaper
  • quicker
  • insights
  • flexible
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20
Q

Drawbacks of sampling

A
  • biggest risk
  • bias
  • less useful in segments with changing tastes
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21
Q

Confidence intervals

A

Percentage probability that an estimated range of possible values includes the actual value

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22
Q

The value of technology in gathering and analysing data for marketing decision making

A
  • allow quick analysis of big data

- allows constant analysis of new coming data

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23
Q

Price elasticity of demand

A

Higher than 1 - price elastic
- change in price causes a larger change in demand

Lower than 1 - price inelastic

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24
Q

Factors that influence PED

A
  • degree of product differentiation
  • availability of substitutes
  • branding and brand loyalty
  • necessity
  • habit
  • time
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25
Q

Income elasticity of demand

A
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26
Q

Price elasticity of demand formula

A

% change in quantity demanded

% change in price

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27
Q

Income elasticity of demand

A

% change in demand

% in real incomes

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28
Q

Analysis of income elasticity of demand

A
  • more than one - income grows more spent
  • less than one more than 0 - income grows less spent
  • inferior goods - less than one - income rises demand falls
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29
Q

Value of price and income elasticity of demand on marketing decision making

A

sales forecasting
pricing strategy
certain products will do better in certain economic climates

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30
Q

The use of data in marketing decision making and planning

A

Planning
- predict future sales and manage stock levels
- see where to focus time and what sectors will grow
Decision making
- who to market to

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31
Q

The process of segmentation

A
  • conduct research into customer types
  • see if they have common tastes and habits
  • identify the segment you wish to focus on
  • conduct research
  • devise a product
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32
Q

Value of market segmentation

A
  • improves sales volume
  • increase prices
  • increase diversification and security
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33
Q

Ways you can segment a market

A
  • demographically
  • geographically
  • income
  • ## behavioural
34
Q

Mass market

A

Aim to create products with a universal appeal marketing at the whole market

35
Q

Niche marketing

A

Small segment of the mass market

36
Q

influences on target market and positioning

A
  • competition
  • if someone has already captured that market
  • growth in a market or sub sector
  • other companies choices
  • authenticity
  • ability to research market
37
Q

What are the 7 Ps

A
  • product
  • price
  • promotion
  • place
  • people
  • process
  • physical environment
38
Q

Influences on the marketing mix

A 
Type of good 
- regular purchase 
- impulse purchase 
- emergency purchase 
Where the product is sold 
- online 
- face to face 
Target market 
- customers 
- businesses 
Stage of the life cycle 
Market research
39
Q

Effects of changes on the marketing mix

A 
Change in price 
- marketing 
- promotional mix 
Economic downturn
- change in price 
- change in how to advertise 
- may switch to online to save costs
40
Q

Convenience goods

A

Bought out of habit or impulse

41
Q

Shopping goods

A

Careful selection process by the buyer

42
Q

Speciality goods

A

One off process that require serious effort

43
Q

Industrial goods

A
  • bought by other businesses

- bought for further processing or for use in conducting business

44
Q

Consumer products

A
  • bought by final consumers

- differ in the way consumers buy them

45
Q

What elements of the marketing mix are most important to convenience products

A 
Price 
- low 
Place
- widespread  
Promotion 
- mass promotion
46
Q

What elements of the marketing mix are most important to shopping products

A 
Price 
- higher 
Place 
- selective distribution 
Promotion 
- advertising by producer and resellers
47
Q

What elements of the marketing mix are most important to speciality products

A 
Price 
- high 
Place 
- exclusive 
Promotion 
- more carefully targeted
48
Q

The value of the product life cycle

A
  • plan marketing decisions
  • alter marketing mix
  • forecast sales trends
  • analyse product portfolio
  • focus investment in products
  • market targeting and positioning
49
Q

Boston matrix

A

Cash cow
Problem child
Rising star
Dogs

50
Q

What is a cash cow

A

High market share of a low growth market

  • generates high profits
  • promotional costs low
  • can milk cash and reinvest in different products
51
Q

What is a problem child

A

High growth market but low market share

  • may provide high future profits
  • success is uncertain
  • need high level of investment to promote
52
Q

What is a dog

A

Low market share of a declining market

- will be stopped to remain profitable once break even output no longer reached

53
Q

What is a rising star

A

High market share of a fast growing market

  • may need protecting from competitors
  • still need heavy promotion
54
Q

Value of product portfolio analysis

A
  • useful tool for analysing decisions
  • snapshot of current position
  • little or no predicted value
  • does not take into account environmental factors
  • flaws which assumptions are made off
55
Q

How can product portfolio analysis be criticised

A
  • market growth is a inadequate measure
  • market share is an adequate measure
  • ignored sustainable competitive advantage
  • product life cycle varies
56
Q

Stages in the product life cycle

A
  • development
  • introduction
  • growth
  • maturity
  • decline
57
Q

Describe the development stage of the product life cycle

A
  • complex
  • absorbs recourses
  • may not be successful
  • long lead time
58
Q

Describe the introduction stage of the product life cycle

A
  • new product launched
  • low sales
  • low capacity utilisation
  • high unit costs
  • heavy promotion
  • negative cash flow
59
Q

Describe the growth stage of the product life cycle

A
  • much faster growing sales
  • product gains market acceptance
  • unit costs fall with economies of scale
  • market grows, profits rise but attract the entry of new competitors
  • cash flow may become positive
60
Q

Describe the maturity stage of the product life cycle

A
  • slower sales growth as rivals enter market
  • low unit costs
  • high profits for high market share
  • weaker competition leaves market
  • price falls
  • cash flow should be strongly positive
61
Q

Describe the decline stage of the product life cycle

A
  • falling sales
  • market saturation
  • rapid fall in profits and weak cash flow
  • more competitors leave the market
  • excess capacity and rising unit costs
62
Q

Criticisms of the product life cycle

A
  • shape and duration of the cycle varies from product to product
  • strategic decisions change life cycles
  • hard to know where a product is in life cycle
  • length cannot be reliably predicted
  • decline not inevitable
63
Q

Extension strategies

A
  • targeting a new segment
  • develop new uses for product
  • increasing usage of product
  • change product appearance
64
Q

Influences on the value of new product development

A
  • understanding of consumers within a market segment
  • the creativity to be able to see issue and resolve
  • enough resources to be able to develop an idea effectively and market it
65
Q

How important are pricing decisions

A
  • customer sensitive to price
  • level of competitive activity
  • the availability of the product
66
Q

Price skimming

A

High initial price and lowered over time

67
Q

Price penetration

A

Lower initial price to gain market share

68
Q

Advantages of price skimming

A
  • help establish a product as a must have
  • early adopters will want exclusivity
  • cover high research and development costs
69
Q

Disadvantages of price skimming

A
  • some customers may be put off by rip off pricing
  • image may suffer with cut prices
  • people who bought at high price may be annoyed
70
Q

Advantages of price penetration

A
  • low prices products may attract high sales volume
  • high sales volume help to cut production costs per unit
  • achieving high sales volume ensure shops will provide high distribution level
71
Q

Disadvantages of price penetration

A
  • may affect brand image and make the product look cheap
  • hard to gain distribution in most upmarket
  • pricing on the basis of value for money
72
Q

The value of branding

A
  • business can spend less on promotion
  • customers are likely to repeat purchase
  • easy to gain distributors
  • other products can be promoted with same brand name
  • customer loyalty and higher prices
73
Q

Multi channel distribution

A

Business using more than one distribution channel

74
Q

Benefits of multi channel distribution

A
  • allows more target market segments to be reached
  • customer expect to be able to buy in different ways
  • higher sales
75
Q

Drawbacks of multi channel distribution

A
  • potential for channel conflict
  • loss of profit margin to intermediaries such as retailers and distributors
  • danger that pricing strategies becomes confused
76
Q

Above the line promotion

A
  • paid for communication in the independent media advertising on TV or in newspapers
77
Q

Below the line promotion

A

Promotional activities where the business has direct control

78
Q

What is the promotional mix

A

Variety of promotional methods used

79
Q

Methods of promotion

A
  • advertising
  • public relations and sponsors
  • personal selling
  • direct marketing
  • sales promotion
  • product placement
  • social media
80
Q

Factors that influence the promotional mix

A
  • type of product
  • finance available
  • competitors actions
  • nature of the market
  • target market
81
Q

Reasons for promotion

A
  • to create or increase sales
  • to persuade customers to buy the product
  • to create or change the image of a product
  • to inform / remind customers about the product
82
Q

Distribution channels

A

Different ways a business can distribute their products

Business (21 decks)

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