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Business > Topic 3 - Marketing > Flashcards

Topic 3 - Marketing Flashcards

1
Q

Corporate Objectives

A
  • those that relate to the business as a whole
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2
Q

Internal Influences on Marketing Objectives

A
  • corporate objectives
  • finance
  • HR
  • operational issues
  • business culture
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3
Q

External Influences on Marketing Objectives

A
  • economic environment
  • competitor actions
  • markets dynamics
  • technological change
  • social and political change
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4
Q

Market Size

A

indicates the potential sales for a firm

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5
Q

Market Growth

A

indicator for existing and potential market entrants

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6
Q

Market Share

A

how the overall market is split between existing competitors

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7
Q

Market Segmentation

A

involves dividing a market into parts that reflect different customers needs and wants:
- demographic, age, job, gender
- behavioural, usage, loyalty, attitudes
- income
- geography

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8
Q

Benefits of Market Segmentation

A
  • focus on resources of a market where the business can succeed
  • helps with new product development
  • better targeting at promotion
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9
Q

Drawbacks of Market Segmentation

A
  • markets are increasingly dynamic fast changing
  • data not always available, up to date or reliable
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10
Q

Niche Marketing

A

where a business targets a smaller segment of a larger market

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11
Q

Mass Marketing

A

a business sells into the largest part of the market

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12
Q

Marketing Mix (7Ps)

A

the combination of elements used by a business to enable it to meet the needs and expectations of customers
- product
- people
- price
- place
- promotion
- process
- physical environment

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13
Q

Consumer Products

A

bought by final customers for personal consumption

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14
Q

Industrial Products

A

bought for further processing or for use in conducting a business
bought by other businesses, not consumers

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14
Q

Types of Consumer Products

A

Convenience
- bought frequently
- price tends to be low
- widespread distribution
- mass promotion
Shopping
- customers careful on quality, price, brand, style etc
- price tends to be higher
- advertising by producer and resellers
Speciality
- unique characteristics or brand
- high price
- targeted promotion

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15
Q

Types of Industrial Products

A

Materials and Parts
- raw materials, components
-mostly sold to other industrial users
Capital Items
- industrial products used in production or operation
- e.g. IT systems, buildings infrastructure
Supplies and Services
- operating supplies (e.g. energy)
- business services (e.g. security)

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16
Q

Product Life Cycle Stages

A

Development
Introduction
Growth
Maturity
Decline

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17
Q

Development

A
  • absorbs lots of resources
  • may not be successful
  • long lead time before sales are achieved
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18
Q

Introduction

A
  • new product launched on the market
  • low level of sales
  • high unit costs
  • low capacity utilisation
  • heavy promotion
  • usually negative cash flow
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19
Q

Growth

A
  • expanding market but arrival of competitors
  • fast growing sales
  • rise in capacity utilisation
  • unit costs fall with economies of scale
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20
Q

Growth Strategies

A
  • advertising to promote brand awareness
  • improve product
  • go for market penetration
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21
Q

Maturity

A
  • slower sales growth as rivals enter the market
  • high level of capacity utilisation
  • weaker competitors start to leave the market
  • prices and profits fall
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22
Q

Maturity Strategies

A
  • attract new users
  • persuasive advertising
  • manage capacity and promotion
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23
Q

Decline

A
  • falling sales
  • decline in profits and weaker cash flows
  • more competitors leave the market
  • decline in capacity utilisation
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24
Q

Product Portfolio Analysis (Boston Matrix)

A

assesses the position of each product or brand in a firms portfolio to help determine the right marketing strategy for each

25
Q

Question Marks

A
  • low share of a rapidly growing market
  • cash flow is negative
  • future is uncertain
  • could become either a star or a dog
26
Q

Question Market Strategies

A
  • invest to increase market share
  • invest in promotion
27
Q

Star Products

A
  • high share of a rapidly growing market
  • require high marketing spending
  • product is relatively strong
28
Q

Star Product Strategies

A
  • invest to sustain growth
  • build sales
29
Q

Cash Cow Products

A
  • high share of a slowly growing market
  • mature stage
  • dominant share
30
Q

Cash Cow Strategies

A
  • defend market share
  • little need for investment
  • little potential for growth
31
Q

Dog Products

A
  • product that have failed
  • decline phase
32
Q

Dog Product Strategies

A
  • sell off
  • not worth investing
33
Q

Advertising

A
  • paid-for communication
  • TV, radio, social media, billboards
  • mass market advertising is very expensive
34
Q

Advertising Advantages

A
  • wide coverage
  • control of message
  • communicated effectively
35
Q

Advertising Disadvantages

A
  • expensive
  • impersonal
  • lacks flexibility
36
Q

Personal Selling

A
  • person to person bias
  • two way communication
  • by telephone, meetings, knocking on doors
  • technical products, high priced low volume
37
Q

Personal Selling Advantages

A
  • interactivity
  • potential for development of a relationship
  • adaptable
  • opportunity to close sale
38
Q

Personal Selling Disadvantages

A
  • high cost
  • labour intensive
  • only reach limited customers
39
Q

Sales Promotion

A
  • short term incentives to increase sales
  • designed to stimulate purchases
  • coupons, loyalty points, BOGOF
40
Q

Sales Promotion Advantages

A
  • quick boost to sales
  • encourages customer to trial a product or switch brands
41
Q

Sales Promotion Disadvantages

A
  • may damage brand image
  • customers may expect further promotions
42
Q

Public Relations (PR)

A
  • public relation activities are those that will create goodwill toward an individual, business, cause or product
  • achieve favourable publicity about the business
  • build the image and reputation of the business and its products
  • communicate effectively with customers or stakeholders
43
Q

Examples of Public Relations

A
  • promoting new products
  • enhancing public awareness
  • promote social responsibility
44
Q

Price Skimming

A
  • set a high price to maximise profits
  • product is sold to different market segments at different times
  • best used in introduction or early growth stage
  • electronic items
45
Q

Penetration Pricing

A
  • opposite price skimming
  • offer a product at a low introductory price
  • gain market share quickly
  • build customer usage and loyalty
  • price can be increased once target market share is reached
46
Q

Dynamic Pricing

A
  • businesses set flexible prices for products or services based on current market demands
47
Q

Distribution

A

main objective of distribution is to make products available in the right place at the right time in the right quantities

48
Q

What is a distribution channel?

A

moves a product through the stages from production to final consumption

49
Q

Retailers

A
  • the final step in the chain, deals directly with the customer
  • focused on consumer markets
  • retailer chooses final price
  • convenience for customers
  • retailer holds stock
50
Q

Wholesalers

A
  • buy in large quantities from producers
  • break into smaller quantities to sell to retailers
  • wholesaler makes money by buying at a lower price from the producer and adding a profit margin onto the price paid by the retailer
51
Q

Distributors

A
  • distribute (sell on) products and serve as a local sales point
  • usually specialise in a particular industry e.g. building supplies, electrical components
  • different from agents in that a distributor holds stock
52
Q

Agents

A
  • specialist type of distributor
  • doesn’t hold stock
  • earns commission
53
Q

Two types of channels

A

Direct
Indirect

54
Q

Reasons to use indirect

A
  • customers may live too far away to be reached directly or widely spread
  • consolidation of small orders into big ones
  • lack of retailing expertise
55
Q

Multi channel distribution

A

involves a business using more than one type of distribution channel

56
Q

Elasticity

A

measure the responsiveness of demand to a change in the relevant variable such as price or income

57
Q

PED Formula

A

% change in quantity demanded/ % change in price

58
Q

Price Elastic

A

change in demand is more than the change in price (>1)

59
Q

Price Inelastic

A

change in demand is less than the change in price (<1)

60
Q

Factors Influencing PED

A
  • brand strength
  • necessity
  • habit
  • availability of substitutes
  • time
61
Q

Income Elasticity of Demand Formula

A

% change in quantity demanded/ % change in income

Business (8 decks)

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